;-NRLF 


SB    M7    E73 


REPORT 

OF 

ILLINOIS  PENSION  LAWS  COMMISSION 

1918-1919 


A  Proposed  Standard  Plan  for  a  Comprehensive 
and  Permanent  System  of  Pension  Funds 


(Printed  by  Authority  of  the  State  of  Illinois) 


GIFT  OF 

Dr.    H.P.    Bates 


REPORT 

OF 

ILLINOIS  PENSION  LAWS  COMMISSION 

1918-1919 


A  Proposed  Standard  Plan  for  a  Comprehensive 
and  Permanent  System  of  Pension  Funds 


(Printed  by  Authority  of  the  State  of  Illinois) 


:-  -  ••*    <a 

DEPT. 


111. 


CONTENTS 

PAGE 

Act   providing  for  creation  of  the   Illinois  Pension  Laws  Commission 1 

Members    and    staff    of    the    Commission 2 

Letter    of    transmittal    3 

Excerpt  from  the  Message  of  the  Governor,   1919 4 

CHAPTER  I— GENERAL  INTRODUCTION 

Would   replace   unsound  systems  under   the  fifteen   present  pension  laws   of   Illinois 5 

Builds   on    investigation    of    1916    Commission 5 

Existing    pension    funds    financially    insecure 6 

Present    pension    laws   lack    uniformity    and    are    not    comprehensive 6 

Full  list  of  present  pension  laws   for   public  employes 7 

Legislators   receive   petitions   for   pension   legislation   at   session   after   session 7 

Larger  aspects  of  the  pension  problem • 8 

Some    of   the    principal    features   of   the   proposed    Standard    Plan 

Present   pensions   assured   to   present   employes  and   pensioners 10 

Commission     meetings     and     public    hearings     held 

Wide   demand   for  information   on   reserve   system 11 

State    regulation    of    private    pension    funds    discussed 12 

CHAPTER   II— MEMORANDUM   ON   FINDINGS   AND   CONSTRUCTIVE    RECOMMEN- 
DATIONS OF  THE  ILLINOIS  PENSION  LAWS  COMMISSION 

Pension  funds  under  fifteen  present  laws  are  insolvent 13 

Situation  calls  for  three  kinds  of  insurance  in  one  system 14 

Commission  strives  to  deal  with  problem  in  a  broad  way 14 

Recommends  Standard  Plan  for  combined,  comprehensive  and  permanent  annuity  and 

insurance  system  15 

Actuarial  science  shows  balance  sheet  for  the  future 15 

Reserve  basis  the  outstanding  feature  of  the  Standard  Plan 16 

Scale  of  benefits  under  the  Standard  Plan 17 

Contributions  by  employes  and  by  public  as  employer 18 

Refunds  are  provided  19 

Special  provisions  for  extending  the  Standard  Plan  to  present  employes  and  present 

pensioners 19 

Consolidation  of  small  funds,  equalization  of  risks,  centralized  supervision  of  the  system  21 
Administration  by  representative  local  retirement  boards  and  a  central  state  supervising 

board  22 

Actuarial  reserve  systems  recently  established  in  other  states 23 

Supreme  courts  hold  pension  systems  promote  efficiency 23 

CHAPTER    III— EXPOSITION    OF    THE    MAIN    PROVISIONS    OF    THE    STANDARD 
PLAN    FOR    A   COMBINED,    COMPREHENSIVE   AND    PERMANENT   AN- 
NUITY AND  INSURANCE  SYSTEM  FOR  PUBLIC  EMPLOYES 

Employes  to  whom  the  plan  is  applicable 25 

Main  objectives  of  the  Standard  Plan 25 

Definitions     25 

A  plan  for  future  entrants  the  first  step .+ 26 

OUTLINE  OF  THE  STANDARD  PLAN  FOR  FUTURE  ENTRANTS 

I.  Old  age   retirement  annuities 

1.  Amount    of    anuity     26 

2.  Contributions   by   employer   and    employe 27 

3.  Refund    of    contributions    with    interest 28 

II.  Life  insurance 

1.  Limited    payment    insurance     29 

2.  Amount  of  insurance    29 

3.  Premiums    for    life    insurance 29 

4.  Method    of    payment    of    premiums 29 

5.  Conversion  of  insurance  into  a  survivorship  annuity   for  wife 29 

6.  Right  of  a  withdrawing  employe  to  continue  his  insurance 29 

7.  Life    insurance    optional    for    women,    and    for    other    employes    not    paid    on 

an    annual    basis    29 

8.  Maximum   limitation  on  per  cent  of  salary  contributed  for  life  insurance...  29 

III.  Sickness  and   accident  insurance 

1.  When  the  sickness  or  accident  are  not  the  direct  result  of  the  performance 

of  duty   30 

2.  When  disability   is  the   direct   result  of  the   performance  of  duty 30 


624668 


IV. 

CONTENTS— Continued. 

IV.  Benefits   for   children   of   employes   who    die   while   in   service,    or  when   retired 

on   annuity   and  for  children  of  those   disabled  in  the   performance  of  duty 

V.  Method  of  administration 

1.  Retirement    board    31 

2.  State    board    of    trustees 31 

MODIFICATIONS  OF  THE  PLAN  OUTLINED  FOR  FUTURE  ENTRANTS  TO  MAKE  IT  APPLICABLE 
TO  PRESENT  EMPLOYES 

I.  Old  age  retirement  annuities  for  present  employes 

1.  The   part   of   the   annuity    to    be    provided    solely    by    the    contributions    from 

the    employer    31 

2.  The    part    of    the    annuity    to    be    provided    solely    by    contributions    of    the 

employe  through   deductions  from  salary 32 

3.  A   present   employe    to    receive   benefits   at    least   equal    to    those    specified    in 

a  superseded  act  to  which  he  was  a  contributor 32 

II.  Life  insurance  for  present  employes 

1.  The   part  of  life   insurance  to   be  provided  solely  by  the  contributions   from 

the    employer    33 

2.  The   part   of   the    life    insurance   to   be   provided   solely   by   the   contributions 

from    the    employe    from    deductions    from    salary 33 

EXPLANATORY  COMMENTS  ON  THE  PROVISIONS  OF  THE  STANDARD  PLAN 

Reserve  basis  for  old-age  retirement  annuities  and  life  insurance — cash  disburse- 
ment basis  for  other  benefits 33 

Annuities  as  percentage  of  salary  rather  than  a  flat  amount 34 

Basis  for  recommending  annuities  of  50  per  cent  of  salary  for  policemen  and  fire- 
men and  40  per  cent  of  salary  for  other  employes 35 

The  amount  of  annuity  is  determined  at  the  standard  age  of  retirement 35 

Standard  ages  of  retirement  based  on  experience 36 

Ratios    of    contributions    by    employer    and    employe    in    the    Standard    Plan    are    put    on 

practical    basis     36 

Life    insurance    when    payable   to    widows   or   children   would   be    in    installments    for 

life   or  for  a  term   of  years 37 

Mortality  tables  and  interest  rates  recommended  by  the  Commission 37 

Amounts    of    life    insurance    prescribed    are    those    necessary    to    provide    survivorship 

annuities    for    wives     38 

The  accrued  liabilities   and  the  long  term   installment  plan  of  liquidation 39 

The   limitation   on   percentage   of   salary   contributed , 39 

Significance  of  requiring  all  contributions  toward  old-age  retirement  annuity 
during  the  first  twenty-five  years  of  servce  if  limitation  on  percentage  of 
salary  will  permit  39 

ON  THE  COST  OF  THE  ANNUITY  AND  LlFE  INSURANCE  FEATURES  OF  THE  STANDARD  PLAN 
EXPRESSED  IN  PERCENTAGES  OF  SALARY 

Old-age    retirement    annuities 41 

Life    insurance 42 

ON  THE  COST  OF  COMBINED  FEATURES  OF  THE  STANDARD  PLAN  EXPRESSED  IN  PERCENT- 
AGES OF  SALARY 
Estimates  of  cost  vary  in  accuracy    _ 45 

COST   TO   THE   PUBLIC   OF   MEETING   THE   LIABILITIES   UNDER   THE   STANDARD   PLAN    ON 

ACCOUNT  OF  PRESENT  EMPLOYES  AND  PRESENT  PENSIONERS 

THE  COST  OF  THE  PROPOSED  STANDARD  PLAN  IN  RELATION  TO  THE  PROBLEM  OF  TAXATION 
INVOLVED 

Present  laws  would  ultimately  require  greater  taxation  than  Standard  Plan 46 

Plan   provides   for   more   benefits 47 

Establishment    of    sound    pension    system    is    urged 48 

CHAPTER  IV— TABLES,  WITH  ACCOMPANYING  EXPLANATIONS,  ILLUSTRATIVE 
OF  THE  OPERATION  OF  THE  ANNUITY  AND  LIFE  INSURANCE  FEATURES 
OF  THE  STANDARD  PLAN 

Amounts  of  contributions   and  annuities  vary   for  employes   as  years   of  service,   salaries 

and  ages  at  entrance  and  retirement  vary 49 

PROVISIONS  OF  STANDARD  PLAN  AFFECTING  THE  CALCULATIONS  OF  THIS  CHAPTER 

Standard    and   minimum    ages   of   retirement 49 

Conversion    of    life    insurance    into    widows'     annuities 50 

Contributions   made    by    both    employer    and    employe 50 

Mortality    table    and    rates   of   interest 51 

Amount  of  accumulation  to  the  credit  of  an  employe  for  annuity  purposes 51 

Refunds     52 

Limitation    on    contributions    52 

Period  in  which  contributions  for  old-age  retirement  annuity  will  be  made 52 

Period  in  which  contributions  for  life  insurance  will  be  made. 53 


V. 

CONTENTS— Continued. 

PAGE 

OLD-AGE  RETIREMENT  ANNUITY 

Salary   scales    " 53 

Illustrative    tables    showing    the    contributions    required    when    the    employe     enters 
the  service  at  an  age  which  will  permit  of  twenty-five  or  more  years  of  service 

before  he   attains  the   standard    age  of   retirement 55 

Combined  total  percentages  given  in  tables  I,  II  and  III 57 

How  percentages  of  salary  may  be  found  for  ages  not  given  in  tables  I,  II  or  III..  57 
Illustrative   tables   from    which   may   be    derived   the   contributions  required  when   the 
employe  enters  the   service  at  an  age  which   will   not  permit   of  at  least  twenty- 
five  years  of  service  before  he  attains  the  standard  age  of  retirement 58 

Use   of   tables    IV   and   V 59 

Accumulations    from    contributions    made    for    old-age    retirement    annuity 60 

Amounts  of  annuity  upon  withdrawal  from  service  after  at  least  ten  years  of  service..  61 

Amounts   of   annuity  at  standard  age   of  retirement 63 

Amounts   of   annuity  at   minimum   age   of   retirement 64 

LIFE  INSURANCE 

Premium  for  insurance  for  any  year  can  be  determined  from,  table  XVIII  or  XIX..  66 
Table   XVIII   or   XIX    may   be   used   to    determine    the    amounts   of   premiums   to    be 

paid   when   the   salary   increases   as    the    years   of   service    increase 67 

AMOUNTS  OF  WIDOW'S  ANNUITY 

SURVIVORSHIP  ANNUITIES 

Cost  of  survivorship   annuity    71 

Amounts  of  survivorship   annuities  provided  by  the   Standard  Plan 72 

STANDARD  PLAN  AS  IT  RELATES  TO  PRESENT  EMPLOYES 

Part  of  old  age  retirement  annuity  provided  by  the  employer    73 

Part  of  old  age  retirement  annuity  provided  by  the  employe    74 

Part  of  life  insurance     provided  by  the  employer     75 

Part  of  life  insurance  provided  by  the  employe    77 

Amounts  of  widows'  annuities 77 

Amounts    of    survivorship    annuities 77 

Further  provisions  affecting  widows  of  present  employes 78 

CHAPTER   V— DISTINCTIVE    FEATURES    OF    STANDARD    PLAN    FOR   A    COMPRE- 
HENSIVE SYSTEM  OF  PENSION  FUNDS 

Pensions  are  a  part  of  employe's  compensation  for  services 79 

System   should  be  extended  to  all   public  employes 80 

Plan    provides    protection    against    dependence    during    productive    period 80 

Haphazard  benefit  schemes  would  be  replaced  by  sound  insurance 81 

Standard  Plan  distinctive  in  consolidating  provisions  for  three  hazards 82 

Systems    under    fifteen    present    laws   would    be    consolidated 83 

Approves  having  elected  employes  the  majority  on  each  retirement  board 83 

Central  state  board  of  control  to   standardize  and  supervise : 84 

How  the  equalization   fund  would  care   for   variations 84 

Would   give    all    benefit    of   law    of   averages 85 

Applies    law    of   averages    to    protection    against   hazard    of   death 85 

Justice  requires  protection  for  those  who  leave  service  before  age  of   retirement 86 

On   widows'    pensions   present   laws  make    unfair    discrimination 86 

Found   practicable   and  more   equitable   to   offer  life   insurance   to   all   employes 87 

How   survivorship  annuity  to  widow   of  retiring  employe  is  provided 88 

One    to    one    ratio    in    contributions    for    insurance 89 

Use   of   equalization   fund   for   insurance < 

Small  groups  can  come  in  only  under  a  reserve  system 89 

Description  of  reserve  plan  given  in  1910  report 90 

Recommendations  for   actuarial  reserve  plan   are   repe'ated  and  supplemented 90 

Provision  is  made  for  those  who  leave  the  service  before  retirement  age 90 

Disability  provisions  put  on  cash  disbursement  basis 91 

Standard    Plan    has    many   advantages — requires    each    generation   to   provide    for    its   own 

obligations    for    the    future 92 

CHAPTER  VI— COSTS  TO  EMPLOYERS  OF  ANNUITIES  AND  OTHER  BENEFITS 
INVOLVED  IN  THE  STANDARD  PLAN 

CHAPTER  VII— THE  STANDARD  PLAN 

Section     1.     Definitions     95 

Section     2.     When  employes  shall  come  under  the  provisions  of  this  act 97 

Section     3.     Groups     of     employes 97 

Section     4.     Retirement    boards     101 

Section     5.     Custodian    of    funds 103 

Section     6.     Duties     of    retirement     boards 103 

Section     7.     Retirement    commission     106 

Section    8.     Duties  of  the  retirement  commission .  107 


VI. 

CONTENTS— Continued. 

PAGE 

Section     9.     Duties    of    the    employer 108 

Section  10.     Legal   counsel    109 

Section  11.     Oath    of    office    and    qualification 109 

Section  12.     Payments     and     Deposits 110 

Section  13.     Investments      110 

Section    14.     Funds    of    retirement    boards Ill 

Expense     fund     , Ill 

Employer's    annuity    fund    , 112 

Children's    annuity    fund    113 

Compensation    fund 114 

Salary    deductions    for    annuity    fund 115 

Annuity    reserve    fund 116 

Employer's  life   insurance   fund    117 

Employes'   life  insurance  fund   118 

Sickness  and  accident  insurance  fund 119 

Investment    and    interest    fund 119 

Employers'  supplementary  fund 119 

Section  15.     Treatment   of   assets   and   obligations   of   prior   existing   pension    funds 120 

When    employers   are   identical   with   those   under   superseded   acts 120 

When  employes   are   not  identical  with  those  under  superseded  acts 122 

Section   16.      Equalization     funds      124 

Refund    equalization    fund     124 

Annuity    equalization    fund 124 

Life    insurance    equalization    fund 125 

Provisions  when   amounts   in  equalization    funds  are  insufficient 125 

Provisions  when    surplus   exists   in   equalization   funds 125 

OLD  AGE  RETIREMENT  ANNUITY 

Section  17.     Amount    of    annuity    126 

Section  18.     Ratio   of  contributions   as  between   employer    and   employe 126 

Section   19.      Limitation    in    contributions    of   employe    for    old   age   retirement   annuity....    127 

Section  20.     Plan  of  accumulation   for  old   age  retirement   annuity 127 

Section  21.     Provisions  for  contributions  after  twenty-five  years  of  service 128 

Section  22.      Supplementary    annuities    of    present   employes 128 

Section  23.     Contributions   on   behalf   of   and   by   present  employes   after   the   dates   when 
they   come   under   the  provisions   of  this  act  and   amounts   of   annuities   available   on 

account   of   service   rendered  after   such   dates 129 

Section  24.     Annuity    privileges    in    case    of    withdrawal    from    service    after    at    least   ten 

years  of  service  before  attainment  of  the  minimum  age  of  retirement 131 

Section  25.     Annuity    privilege    in    case    of    withdrawal    from    service,    after    at    least    ten 
years   of   service,   upon   or   after   attainment   of   the   minimum    age   of   retirement,    and 

before   attainment    of   the    standard   age   of   retirement 132 

Section  26.     Annuity  privilege  of  a   future  entrant,   or  of  a  present   employe,   upon  with- 
drawal from  service  upon  or  after  attainment  of  the  standard  age  of  retirement 133 

Section  27.     Annuity    privilege,    upon    withdrawal    from    service,    of    a    present    employe, 
who    is    of   the    standard    age    of    retirement    or    older,    on    the    date    when    he   comes 

under    the    provisions    of    this    act 134 

Section  28.     Modification  of  provisions  of  this  plan  affecting  present   employes 134 

LIFE  INSURANCE 

Section  29.     Amount  of  life  insurance  to  be  provided 135 

Section  30.     Ratio  of  contributions  as  between  employer  and  employe 136 

Section   31.     Plan   of   premium   payment   for   a   future   entrant 137 

Section  32.      Life   insurance   of   present   employes 137 

Section  33.     Limitation  upon  contributions  by  employer  and  employe  for  life  insurance...    138 
Section  34.     Provisions  regulating  payment  of  life  insurance  otherwise  than  in  annuities.    138 
Section  35.     Disposition    of    insurance    furnished    by    employer    upon    resignation    or    dis- 
missal   from   service   of   the    employe  before   his    attainment   of   the   minimum  age   of 

retirement •  .    139 

Section  36.     Insurance  privilege  for  employe  upon  dismissal  or  withdrawal  from   service 

before   entering  upon   his   annuity 140 

Section  37.     Annuities    for    widows    of    employes    who    die    while    in    service,    and    before 
attaining   the   standard   age    of   retirement,    from   causes   other   than   the   performance 

of  duty    140 

Section  38.  .  Annuities    for    widows    of    employes    who    withdraw    from,    service    after    at 
least  ten  years  of  service  and  retain  their  annuity  privileges,  but  die  before  entering 

upon  annuity 141 

Section  39.     Survivorship    annuities    for   widows    of    future   entrants    and    for   widows    of 

present    employes    142 

Section  40.     Survivorship   annuities  for  widows  of   former  employes 142 

Section  41.     Survivorship  annuities   for   widows   of   employes  who   are   over   the   standard 

age  of  retirement  on  the  dates  when  they  come  under  the  provisions  of  this  act 143 

Section  42.     Modification     of    provisions    concerning    annuities    for    widows    of    present 

employes     143 

CHILDREN'S  ANNUITIES 

Section  43.     Children  eligible  for  annuity 143 

Section  44.     Amounts  of  Children's  Annuities    144 


CONTENTS— Continued. 

PAGE 

SICKNESS  AND  ACCIDKNT   INSURANCE 

Section   45.     Employes  who  shall   be  contributors   for  sickness  and  accident  insurance...    144 

Section  46.     Amounts    to    be    contributed    by    employer    and    employes    for    sickness    and 

accident   insurance   fund 145 

Section    47.      Amount  of   benefit   from   sickness   and    accident   insurance   fund 146 

Section  48.     Annuities    on     account    of    disability    or    death,     in    consequence    of    direct 

performance    of    duty     • 147 

Section   49.      Effect   of   workmen's   compensation 148 

Section   50.     Modification  affecting  employes  whose  salaries  are  on  other  than  an  annual 

salary    basis    149 

Old    age   retirement   annuity    149 

Life    insurance     149 

Sickness    and    accident    insurance 150 

Provisions    for    otl'cr   than    monthly    payments 151 

Section    51.     Provisions    relating   to    life    insurance    when    such    insurance    is    optional 151 

Section  52.     Provisions   affecting  employes   while   on  leave  of   absence 152 

Section  53.     Provisions  affecting  employes  absent  from  service  because  of  disability 153 

Section   54.      Refunds     .  . . 154 

Contributions  to  provide  for  refunds  as  specified  in  this  act 156 

Section  55.     Provisions  in  cases  of  transfer  of  service 157 

Section  56.     General     Provisions     157 

Section  57.     Annuities    exempt    from    attachment,    etc 161 

CHAPTER  VIII— SURVEY  OF  POSITIONS  IN  THE  PUBLIC  SERVICE  IN  ILLINOIS 

Purpose  of  survey  to  determine  extent  of  field  for  pension  legislation 164 

Why   statistics   on   elective   officers  are   included 164 

Judges   cite    pensions    for    others   as   showing   public    policy 165 

Townships  and  cities    or   villages   under    1,000    eliminated 166 

Figures  given  in  1916  report  are  used  as  basis  of  survey 166 

Thanks  to   city,   county,   and   state   officials   for   replies  to   questions 167 

Employes   appointed   under  five  civil   service  acts 167 

Provide  for  service  during  good  behavior  and  efficiency , 168 

All  teachers  must  hold  certificates  of  qualifications 169 

Certificates    imply     continuity     in    teaching    profession 169 

Express  provision  for  permanency   for  Chicago  teachers 170 

Tendency    regarding    appointive    officials    is    recognized 171' 

General  table  shows  positions  on  basis  of  tenure 171 

Seventy-two  cities  should  have  pension   funds  for  firemen   and  policemen 172 

Earl:i-r    i;;ws    required   police    and    fire    funds 173 

failing   to   comply    with    nension   laws 174 

Supreme    Court    sustains    mandatory    law 176 

Small   city    force  not   large   enough   for  a   sound   fund 177 

Consolidation    of  small   funds  is  proposed 177 

Volunteer    firemen    and    provision    for    disability 178 

Employes    other    than    policemen    and    firemen    in    downstate    cities 178 

State  institution  teachers  and  other  state  employes 180 

For  all  state  employes   in  one  fund 180 

Peoria  teachers  and   state  teachers   funds 181 

Small    funds    and    large    funds    in    Chicago 181 

Consolidation    with   municipal    fund   is    urged 182 

Park   services  in   Chicago — present  and  proposed   funds 182 

For  consolidating  the  park  policemen's   pension   funds 183 

Proposed    fund    for   park   employes   other   than    policemen 183 

Counties   have   many   employes t 185 

16,129  officials  and  employes  in  downstate  cities  and  villages  of  over  1000 187 

CHAPTER  IX— STATISTICS  ON  AC^ES,  YEARS  OF  SERVICE  AND  SALARIES  RE- 
LATING TO  POLICEMEN  AND  FIREMEN  IN  CITIES  OF  MORE  THAN  5,000  AND 
LESS  THAN  100,000  INHABITANTS,  AND  TO  STATE  INSTITUTIONAL 
TEACHERS. 

CHAPTER  X— RECENT  DEVELOPMENTS  IN  PENSION  LEGISLATION  IN  OTHER 
STATES  OF  THE  UNITED  STATES. 

SOUND  PENSION  SYSTEMS  Now  BEING  ADOPTED  BY  OTHER  STATES 

Advance    marked    in   new   laws    for   teachers'    pensions 201 

Contributions   of  employe   and   those  of  employer  kept  separate 202 

MASSACHUSETTS  PENSION  SYSTEM  FOR  STATE  EMPLOYES — 1911 

May  retire  voluntarily  at  age  60 203 

MASSACHUSETTS;  ERIE,  PENNSYLVANIA;  AND  CONNECTICUT  SYSTEMS  FOR  TEACHERS. 

THE  NEW  YORK  CITY  AND  STATE  OF  PENNSYLVANIA  SYSTEMS  FOR  TEACHERS. 

Methods  of  meeting  accrued  liabilities  on  account  of  present  employes 204 

A  fin   to   give   retirement  allowance   of  half   salary 204 

w    Permanence    of    these    systems    is    assured 205 


Vlll. 

CONTENTS— Continued. 

CHAPTER    XI— THE    WORLD'S    EXPERIENCE    IN    THE    OPERATION    OF    PUBLIC 
SERVICE  PENSION  SYSTEMS 

PAGE 

i.      EXPERIENCE   IN   THE  UNITED   STATES 

New  York  City's  experience — Deficiency  of  over  $170,000,000 207 

Boston's  experience  similar 208 

System  for  state  civil  service  employes  in  Massachusetts  established  on  actuarial 

basis  208 

Recent  laws  provide  sound  systems  for  teachers  of  New  York  City  and  state  of 

Pennsylvania  208 

The  systems  for  New  Jersey  teachers  cited  as  examples  of  unsound  plans 208 

Summary — Most  state  laws  are  "horrible  examples,"  a  few  exceptions  afford  models..  209 

ii.      EXPERIENCES  IN   GREAT   BRITAIN 

Has  had  civil  service  pensions  for  over  a  century 210 

Contributory     from     1829     to     1857 210 

Non-contributory   law  in    force   from    1859   to    1909 210 

Insurance  included  in  the  present  law — act  of  1909 211 

Cost   of   civil    service    pensions    expressed   in    percentage    of   corresponding   salaries    of 

the     active     staff     211 

Teachers'   pensions   in   Great   Britain   since    1846 — law   requires   actuarial   examination 

of  funds    212 

in.     EXPERIENCES  IN   GERMANY 

EXPERIENCES  IN  AUSTRO-HUNGARY 
EXPERIENCES   IN   FRANCE 
EXPERIENCES  IN   NEW  ZEALAND 

LESSONS  TO  BE  DRAWN  FROM  THE  EXPERIENCES  OF  FOREIGN  COUNTRIES 

Main  lesson  is:     Provide  an  adequate  reserve  fund 214 

CHAPTER    XII— SUMMARY    OF    REPORT    OF    ILLINOIS     PENSION    LAWS    COM- 
MISSION OF  1916 

i.    ACTUARIAL  INVESTIGATIONS  INTO  THE  FINANCIAL  CONDITION  OF  THE  FIVE  CHIEF  FUNDS 
IN  ILLINOIS   (Report  of  1916,  pages  72-199) 

$30,000,000  deficiency  in  the  police  fund  of  Chicago.    (Report  of  1916,  pages  72- 

103)     216 

On   proper  reserve   basis   would  cost   13.6   per   cent 216 

Cost  under  police  fund  law  will  rise  to  40  per  cent  of  salaries 217 

$13,000,000   deficiency   in  the   firemen's   fund   of   Chicago,    (Report  of   1916,   pages 

104-123) 217 

$5,000,000   deficiency  in   the  teachers'    fund   of   Chicago.    (Report  of   1916,   pages 

124-146)     217 

$7,000,000    deficiency    in    the    municipal    employes    fund    of    Chicago.    (Report    of 

1916,   pages   147-160)    218 

Percentage    estimate    on    Illinois    state    teachers'    pension    and    retirement    fund. 

(Report  of  1916,  pages  161-167) 218 

ii.    OPERATION  OF  PENSION  LAWS  IN  .OTHER  COUNTRIES.  (Report  of  1916,  pages  19-35). 
in.    HISTORICAL  SKETCH  OF  PENSION  LAWS  FOR  PUBLIC  EMPLOYES  OF  ILLINOIS.     (Report  of 

1916,  pages  36-41  pages  205-265) 

iv.      PROVISIONS  OF  PENSION  LAWS  OF  OTHER  STATES.   (Report  of  1916,  pages  42-71). 
v.  DATA  ON  THE  EXTENT  OF  PUBLIC  EMPLOYMENT  IN  ILLINOIS  WITH  TENURE  SUCH  THAT 
THE  EMPLOYE  MAY  REASONARLY  BE  INCLUDED  IN  A  PENSION   SYSTEM.     (Report  of 
of  1916,  pages  200-203). 
vi.   STATISTICAL  DATA  RELATING  TO  EACH   FUND  IN   ILLINOIS.    (Report  of   1916,  pages 

168-199). 
vn.  THE   UNDERLYING   PRINCIPLES   OF  A   SOUND    PENSION    SYSTEM.      (Report   of   1916, 

pages  271-284). 
viii.  CONCRETE  PROVISIONS  OF  A  NORMAL  OR  STANDARD  PENSION  PLAN.   (Report  of  1916, 

pages  285-294). 

ix.  SPECIFIC  RECOMMENDATIONS  WITH  RESPECT  TO  IMMEDIATE  LEGISLATION.  (Report 
of  1916,  pages  299-302). 

CHAPTER    XIII— EFFECTS    OF    THE    PENSION    LEGISLATION    OF    1917    BY    THE 
FIFTIETH  GENERAL  ASSEMBLY  OF  ILLINOIS. 

Existing  funds  still  left  on  unsound  basis,  without  permanent  provision  to  meet  their 

accrued  and   accruing   liabilities 223 

CREATION  OF  STATE  INSTITUTIONS  TEACHERS  PENSION  AND  RETIREMENT  FUND. 

REVISION  OF  THE  ACTS  RELATING  TO  EXISTING  FUNDS  FOR  CHICAGO  POLICEMEN,  CHICAGO 
FIREMEN,  CHICAGO  MUNICIPAL  EMPLOYES,  POLICEMEN  IN  CITIES  OF  5,000  TO 
100,000  POPULATION,  AND  FIREMEN  IN  CITIES  OF  5,000  TO  200,000  POPULATION, 


ix 
CONTENTS— Continued. 

PAGE 

1.  Increase   in   financial    support   for   certain   funds 224 

2.  Modification  involving  a  possible  decrease  in  financial  support 225 

3.  Fixing    of    a    minimum    age    of    retirement 225 

4.  Change    in    pensions    for    widows   and    children 225 

5.  Increase   in   pension  to   higher  officers  of  Chicago  police   department 226 

6.  Limitations    on    amount    of    pension    to    any    officer    of   the    Chicago    fire    de- 
partment   to    $3,000    per    year 226 

EFFECT  OF  THE  ACTS  OF  THE   FIFTIETH   GENERAL  ASSEMBLY  ON   THE  FINANCIAL   CON- 
DITIONS OF  PENSION  FUNDS  FOR  PUBLIC  EMPLOYES. 

THE  CHICAGO  POLICE  FUND 

Increase  in  financial  support  improves  fund  somewhat ,..  227 

Fixing  of  a  minimum  age  of  retirement  reduces  cost   227 

Changes  in  pensions  of  widows  and  children  of  employes  a  small  item 228 

Increasing    pensions    to    higher    officers    of    the    Chicago    police    department 

adds    $300,000    to    the    deficit 228 

Total   effect   of   1917    legislation   on   police   fund — leaves  $21,000,000   deficit..  228 

Police   fund   condition   will   grow   worse   unless   law   is   changed 229 

THE  CHICAGO  FIREMEN'S  FUND 

Effect  of  increase  in  financial  support  is  decrease  in  deficit  of  firemen's  fund  230 
Establishing  a  minimum  age  for  retirement  of  firemen  yields  substantial  cut 

in  costs 230 

Increase  in  children's  pensions  adds  somewhat  to  liabilities 230 

Legislation  of  1917  leaves   Chicago  firemen's  fund  with  $7,000,000   deficit...  230 

Calls    for    decided    changes 231 

THE  MUNICIPAL  EMPLOYES'  FUND  OF  CHICAGO 

Average   age   of   retirement  of  first   326    annuitants   is   high 231 

$7,000,000  deficit  on  the  hypothesis  of  retirement  at  age  55,*  when  the  em- 
ploye satisfies  the  service  requirement 232 

$3,000,000  deficit  on  the  hypothesis  of  retirement  at  age  60  when  the  em- 
ploye satisfies  service  requirements,  and  when  the  future  entrants 
are  included  233 

More    legislation    needed    for    permanence    of    municipal    fund 234 

FUNDS   OF   POLICEMEN    IN    CITIES   OF   FROM    5,000   TO    100,000   INHABITANTS   FUNDS    OF 
FIREMEN  IN  CITIES  OF  FROM  5,000  TO  200,000  INHABITANTS  FUNDS  OF  PARK  POLICE. 

REMAINI.V;   FUNDS. 

CHAPTER    XIV— ILLINOIS    STATE    TEACHERS'    PENSION    AND    RETIREMENT 

SYSTEM 

Group  of  teachers  involved — 26,000  outside  of  Chicago   and  Peoria 235 

Benefits    include    retirement    and    disability    annuities 235 

Contributions  both  from  the  teacher  and  the  common   school   fund 236 

CONTRAST  BETWEEN  THE  PENSION  SYSTEM  FOR  ILLINOIS  TEACHERS  AND  THE  SOUND  PEN- 
SION SYSTEMS  FOR  TEACHERS  IN  CERTAIN  OTHER  STATES. 

1.  Contrast  with  respect  to  the  general  plan  of  financing  the   system 236 

2.  Contrast    with    respect   to    conditions    as   to    ages    and    service    for    retirement 

on    pension     237 

3.  Contrast  with  respect  to  amount  of  pension 237 

4.  Contrast   with   respect   to  contributions ' 238 

SUMMARY  OF  CRITICISMS — RETIREMENT  AGE  Low,  FINANCING  INADEQUATE. 

CHAPTER    XV— INDUSTRIAL    AND    INSTITUTIONAL    PENSION    SYSTEMS 

Many   retirement  funds  established   by   railroad,    manufacturing,   banking,   mercantile   and 

telephone   companies,  colleges  and   churches 239 

State  regulation   is   proposed 239 

1.  RAILROAD  PENSION  SYSTEMS 

Trainmen  may  retire  on  pension  at  age  65 240 

2.  PENSION  SYSTEMS  OF  MANUFACTURING  COMPANIES 

Typical   industrial  concerns  having  pension   funds 241 

Manufacturers  send  pamphlets  describing  systems 242 

Relate  amount  of  pension  to  amount  of  salary 242 

Specify  no  contractual  right  to  pension  exists 243 

3.  PENSION  SYSTEMS  OF  BANKING  INSTITUTIONS 

4.  PENSION  SYSTEMS  OF  MERCANTILE  ESTABLISHMENTS 

Mail   order   houses   have   unique   provisions 245 


X. 

CONTENTS— Continued. 

5.  PENSION  SYSTEMS  OF  TELEPHONE  AND  TELEGRAPH  COMPANIES 

Managed  by  the  employers    246 

6.  PENSION   SYSTEMS  FOR  TEACHERS  IN   COLLEGES  AND  UNIVERSITIES 

a.  The     Carnegie    Foundation     247 

Making  changes  to  put  Carnegie   Foundation   on  actuarially  sound  basis 247 

b.  Pension  systems  of  college  not  on  Carnegie  Foundation  list 248 

7.  CLERGY  PENSION  FUNDS 

Oversubscribe  fund  to  place  system  on  sound  basis 248 

GENERAL  POINTS  AND  RECOMMENDATIONS 

Widows'    pensions   a   feature   of  many   systems 249 

Attitude   with    respect    to    employment    for   a    pensioner 249 

State   regulation   of  industrial   and   institutional   pensions   is   recommended 249 

Would    standardize    plans,    assure    adequate    assets   and    provide    for    transfers 250 

CHAPTER   XVI— COURTS   AND    PENSIONS    SYSTEMS— TREND   OF   DECISIONS 

Contents  of  chapter    251-252 

i.   POWER  OF  THE  STATE  TO  GRANT  PENSIONS 253 

n.   POWER  OF  THE  STATE  TO  REQUIRE  MUNICIPALITIES  TO  PAY  PENSIONS  AND  LEVY  TAXES 

FOR    THEM    270 

in.    POWER  OF   MUNICIPALITIES  TO   GRANT  PENSIONS 280 

iv.   PENSIONS     AS     PROPERTY 281 

v.     PERSONS   ENTITLED   TO   PENSIONS.      CONSTRUCTION   OF   PENSION    ACTS 298 

vi.     CONDITIONS  PRELIMINARY   TO   THE   RIGHT  TO  A   PENSION 304 

vn.  CONDITIONS  WHICH  DEFEAT  RIGHT  TO  PENSION,  OR  FORFEIT,  OR  SUBJECT  TO  DISCON- 
TINUANCE,   PENSIONS    GRANTED 313 

vin.   AMOUNT  OF  PENSION 323 

ix.    PENSION     FUNDS      324 

CHAPTER    XVII— DIGEST    OF    ILLINOIS    PENSION    LAWS    ENACTED    IN    1917 

Firemen's    Pension    Fund — Chicago 345 

Firemen's  Pension  Fund — Cities,  villages  and  towns  of  5,000  to  200,000 349 

Policemen's    Pension    Fund — Chicago 352 

Policemen's  Pension  Fund — Cities,  villages  and  towns  of  100,000  to  200,000  inhabitants..    356 

Policemen's  Pension   Fund — Cities,   villages   and  towns  of   5,000   to    100,000 357 

Park     Police     Pension     Fund 360 

Municipal     Employes'     Pension     Fund — Chicago 364 

Municipal    Employes'    Pension    Fund — Chicago 366 

House  of  Correction  Employes'   Pension  Fund — Cities  of  more  than   150,000 367 

Illinois   State   Teachers'    Pension   and   Retirement   Fund,    also   Teachers'   Pension   and   Re- 
tirement   Funds   in    school   districts  of  not   less   than    10,000,   nor  more   than    100,000 

inhabitants     368 

Illinois   State  Teachers'    Pension  and   Retirement  Fund 369 

Teachers'   Pension  and  Retirement  Fund  in  school  districts  of  10,000  to  100,000   (Peoria 

Teachers'     Fund)      369 

State  Institutions  Teachers'  Pension  and  Retirement  Fund 369 


ACT  PROVIDING  FOR  CREATION  OF  THE  ILLI- 
NOIS PENSION  LAWS  COMMISSION,  AND 
DEFINING  ITS  POWERS  AND  DUTIES 


The  following  act  was  passed  by  the  Fiftieth  General  Assembly 
of  the  State  of  Illinois,  and  approved  by  the  Governor  on  June  14, 
1917. 

AN  ACT  providing  for  the  creation  of  a  commission  to  be  known  as  the  Illinois 
Pension  Laws  Commission,  and  defining  the  powers  and  duties  of  such  Com- 
mission. 

Section  1.  Be  it  enacted  by  the  People  of  the  State  of  Illinois,  repre- 
sented in  the  General  Assembly:  That  there  is  hereby  created  a  commission 
to  be  known  as  the  Illinois  Pension  Laws  Commission,  to  consist  of  four 
members,  one  of  whom  shall  be  a  representative  of  one  of  the  public  pen- 
sion funds  of  this  State  heretofore  created  by  law,  the  other  three  of  whom 
shall  be  persons  not  interested  in  any  of  the  said  pension  funds  and  one  of 
whom  shall  be  a  person  versed  in  financial  affairs,  one  a  person  of  actuarial 
experience,  and  one  a  person  of  legal  attainments  who  shall  be  chairman 
of  the  commission,  all  of  whom  shall  be  appointed  by  the  Governor  to  hold 
office  as  members  of  said  commission  until  the  convening  of  the  Fifty-first 
General  Assembly,  at  which  time  said  commission  shall  go  out  of  existence. 

Section  2.  It  shall  be  the  duty  of  said  commission  to  further  investi- 
gate the  operation  of  all  pension  laws  heretofore  enacted  in  this  State;  to 
gather  all  further  available  information  as  to  the  present  and  probable 
future  cost  of  maintaining  the  funds  created  by  said  laws  and  to  collect 
all  further  available  information  in  regard  to  the  operation  of  similar  laws 
in  other  states  and  countries.  The  commission  shall  report  the  results  of 
its  investigations  together  with  any  recommendations  it  may  see  fit  to 
make,  to  the  Governor  not  later  than  December  first,  1918,  for  transmission 
to  the  Fifty-first  General  Assembly. 

Section  3.  The  commission  snail  have  power  to  call  upon  the  Insur- 
ance Department  and  all  other  departments  of  this  State  for  such  assistance 
as  it  may  require,  and  to  employ  one  or  more  actuaries,  a  clerk,  a  stenog- 
rapher, and  such  other  assistance  as  it  may  require.  It  shall  also  have  power 
to  examine  the  books  of  all  present  public  pension  funds  now  existing  by 
law,  to  compel  the  production  of  all  books  and  papers  belonging  to  any 
of  said  funds,  to  administer  oaths  and  to  take  the  testimony  of  all  witnesses 
necessary  for  the  purposes  of  this  Act. 

Section  4.  The  expense  of  said  commission,  including  a  reasonable  per 
diem  to  the  members  thereof  not  to  exceed  ten  dollars  per  day  for  time 
actually  spent  in  such  investigation,  shall  be  paid  out  of  funds  to  be  appro- 
priated for  that  purpose  upon  vouchers  drawn  upon  the  Auditor  of  Public 
Accounts,  properly  itemized  and  certified  to  by  the  chairman  of  the  com- 
mission and  approved  by  the  Governor. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


MEMBERS  AND  STAFF  OF  THE  ILLINOIS  PEN- 
SION LAWS  COMMISSION,  1918-1919 


On  December  19,  1917,  His  Excellency,  Governor  Frank  O.  Low- 
den,  appointed  as  members  of  the  Illinois  Pension  Laws  Commission: 

John  P.  Dillon,  of  the  Bureau  of  Streets,  and  the  Municipal  Em- 
ployes' Pension  Fund,  Chicago. 

Rufus  C.  Dawes,  president  of  Dawes  Brothers,  Incorporated,  Chi- 
cago. 

Henry  L.  Rietz,  then  Professor  of  Mathematical  Statistics  at  the 
University  of  Illinois,  Urbana,  now  professor  and  head  of  the  De- 
partment of  Mathematics  at  the  State  University  of  Iowa,  Iowa  City. 

And  as  Chairman  of  the  Commission: 

George  E.  Hooker,  Civic  Secretary  of  the  City  Club  of  Chicago. 

Messrs.  Dillon,  Rietz,  and  Hooker  had  served  as  members  of  the 
Illinois  Pension  Laws  Commission  of  1916. 

On  February  15,  1918,  the  Commission  appointed  as  its  Staff 
Actuary,  Donald  F.  Campbell,  Professor  of  Mathematics  at  Armour 
Institute  of  Technology,  Chicago,  and  insurance  actuary,  room  640,  76 
West  Monroe  street,  Chicago. 

Dr.  Rietz  served  on  the  Commission's  staff  as  Consulting  Actuary. 

On  February  15,  1918,  the  Commission  appointed  as  its  Secretary, 
Herbert  E.  Fleming  of  the  Efficiency  Engineering  staff  of  Arthur 
Young  &  Company,  Industrial  Engineers  and  Certified  Public  Ac- 
countants, Chicago. 

On  February  5,  1919,  Hon.  Edward  J.  Brundage,  Attorney  Gen- 
eral, assigned  George  E.  Dierssen,  Assistant  Attorney  General,  as 
Special  Counsel  for  the  Commission. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


LETTER  OF  TRANSMITTAL 

To  His  Excellency,  the  Honorable  Frank  O.  Lowden,  Governor  of  the 

State  of  Illinois,  Springfield. 

The  Illinois  Pension  Laws  Commission,  authorized  by  an  Act  of 
the  Fiftieth  General  Assembly,  approved  June  14,  1917,  to  make  cer- 
tain investigations  and  recommendations  concerning  the  pension  laws 
of  Illinois,  submits  herewith  its  report,  including  a  detailed  description 
of  a  proposed  Standard  Plan  for  a  Comprehensive  and  Permanent  Sys- 
tem of  Pension  Laws. 

Respectfully  submitted, 

GEORGE  E.   HOOKER,   Chairman. 
RUFUS  C.  DAWES, 
JOHN  P.  DILLON, 
HENRY  L.  RIETZ. 
Chicago,  Illinois,  April  28,  1919. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


FROM  THE  GOVERNOR'S  MESSAGE 


Governor  Frank  O.  Lowden,  in  his  message,  delivered  in  person 
at  Springfield  on  January  8,  1919,  to  the  Fifty-first  Illinois  General 
Assembly,  discussed  the  pension  situation  in  Illinois  and  its  munici- 
palities. Governor  Lowden  based  his  statement  on  a  Memorandum 
of  the  Findings  and  Recommendations  of  the  Commission  which  had 
been  submitted  to  him  at  his  request  in  December  by  the  Commission. 
This  section  of  Governor  Lowden's  message  was  as  follows : 

"A  commission  was  created  by  your  Honorable  Body  to  investigate  and 
report  upon  the  subject  of  pensions  for  certain  classes  of  public  employes. 

"This  commission  has  made  a  very  exhaustive  study  of  the  subject.  I 
will  submit  its  full  report  to  you  later.  Among  other  things,  however,  that 
commission  has  found  that  nearly  all,  if  not  all,  of  the  several  pension  funds 
created  by  the  different  municipalities  of  the  State,  as  well  as  by  the  State  itself, 
are  hopelessly  insolvent.  These  funds  were  established  with  wholly  inadequate 
provisions  for  their  future.  The  contributions  made  by  the  employes  and  by  the 
municipalities  or  State,  were  altogether  insufficient  to  meet  the  obligations  which 
the  municipalities  and  the  State  have  incurred,  morally  at  least. 

"I  recommend  that  your  Honorable  Body  give  its  fullest  consideration  to 
this  entire  subject.  Either  these  pension  systems  should  be  discontinued  alto- 
gether, or  the  State  should  require  that  they  be  based  upon  sound  actuarial 
principles." 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


CHAPTER  1 
GENERAL  INTRODUCTION 


ADOPTION  OF  A  PROPOSED  STANDARD  PLAN  FOR  A 
COMPREHENSIVE  AND  PERMANENT  SYSTEM  OF 
PENSION  FUNDS  IS  THE  CHIEF  CONSTRUC- 
TIVE RECOMMENDATION 


Would  Replace  Unsound  Systems  Under  the  Fifteen  Present  Pen- 
sion Laws  of  Illinois 

A  proposed  Standard  Plan  for  a  comprehensive  and  permanent 
system  of  pension  funds  to  replace  the  unsound  systems  under  the 
present  pension  laws  for  public  employes  in  Illinois,  is  the  chief  con- 
structive outcome  of  the  work  of  the  Commission. 

Our  central  recommendation  is  the  immediate  adoption  of  the 
Standard  Plan,  first,  for  the  reconstruction  of  all  the  existing  pension 
funds;  second,  for  the  establishing,  by  a  legislative  act,  of  any  new 
fund  where  the  employes  and  employing  bodies  concerned  join  in  a 
demand  for  the  introduction  of  a  pension  system. 

To  these  ends,  for  the  assistance  of  the  Governor  and  the  Gen- 
eral Assembly,  we  have  included  in  this  report  not  only  findings  on 
the  deficiencies  in  the  existing  pension  funds  when  their  promised 
benefits  are  compared  with  their  promised  revenues,  and  not  only 
expository  chapters  on  the  proposed  Standard  Plan  and  on  the  trend 
in  other  states  toward  actuarially  sound  pension  legislation,  but  also 
the  Standard  Plan  in  Detail — the  Provisions  of  a  Bill  for  a  Code  on  a 
Comprehensive  System  of  Pension  Funds. 

Builds  on  Investigation  of  1916  Commission 

These  recommendations  are  the  outgrowth  of  the  work  of  both 
the  present  Commission  and  the  Illinois  Pension  Laws  Commission 
of  1916.  Three  of  the  four  members  of  the  1918-19  Commission, 
including  the  actuary  member,  were  members  of  the  1916  Commission. 
The  same  staff  actuary  served  both  Commissions.  The  present  Com- 
mission has  built  on  the  foundation  laid  in  the  investigations,  hearings, 
and  findings  of  the  former  Commission.  The  work  of  the  former 
Commission  was  chiefly  investigational.  That  Commission  did,  how- 


6  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

ever,  outline  the  underlying  principles  of  a  sound  pension  system. 
The  present  Commission  has  supplemented  the  investigational  work 
of  the  former  Commission.  But  it  has  devoted  its  efforts  chiefly  to 
the  constructive  work  of  creating  the  proposed  Standard  Plan  for 
meeting  the  situation  disclosed  in  the  1916  investigation. 

Existing  Pension  Funds  Financially  Insecure 

The  main  finding  of  the  1916  Commission  was  that  from  an 
actuarial  point  of  view  the  funds  under  the  fifteen  present  pension 
laws  of  Illinois  were  unscientific  and  unsound  financially. 

The  present  Commission  has  further  developed  the  outstanding 
fact  of  the  precarious  financial  future  of  the  pension  funds  under  the 
present  laws.  This  Commission  has  given  additional  study  to  the  fact 
that  there  is  a  vast  difference  between  the  cost  of  the  benefits  promised 
under  the  present  pension  laws  for  public  school  teachers,  policemen 
and  firemen  and  their  widows,  municipal  and  other  employes  on  the 
one  hand,  and  on  the  other  hand  the  amount  of  money  that  can  be 
raised  under  the  provisions  of  these  laws  to  meet  these  pension 
promises.  The  financial  provisions  are  inadequate.  On  this  basis, 
each  of  these  funds  with  perhaps  one  minor  exception  shows  a  defi- 
ciency and  faces  an  increasing  deficiency.  In  the  larger  Chicago  funds 
such  deficits  amount  to  many  millions  of  dollars. 

Present  Pension  Laws  Lack  Uniformity  and  Are  Not  Compre- 
hensive 

Another  finding  of  the  Commission  of  1916,  brought  out  again 
and  emphasized  in  the  work  of  the  Commission  of  1918-19,  is  that 
there  is  a  lack  of  uniformity  in  the  present  pension  laws.  The  exist- 
ing pension  legislation  may  fairly  be  described  as  a  patchwork.  All 
of  these  laws  make  some  provision  for  the  hazard  of  old-age  ineffi- 
ciency. Some  make  provision  for  the  hazard  of  disability  from  accident 
or  illness.  A  few  make  some  provision  for  the  hazard  of  death. 
Each  either  lacks  provision  or  has  inadequate  provision  for  accumu- 
lating, while  service  is  being  rendered,  reserve  funds  with  which  to 
meet  the  pension  obligations  when  they  mature.  All  lack  provision 
whereby  the  individual  employe,  required  to  contribute  to  a  pension 
system,  has  from  the  start  a  definite  amount  to  his  credit,  exclusively 
his  own,  which  is  certain  not  only  to  grow  steadily  from  month  to 
month  but  also  to  be  sufficient  at  the  proper  time  to  provide  the  prom- 
ised annuity.  All  of  the  present  laws  are  open  to  the  abuse  of  diversion 
of  contributions  from  the  purposes  for  which  they  were  originally 
intended. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  7 

Full  List  of  Present  Pension  Laws  for  Public  Employes 

The  fifteen  pension  laws  for  public  employes  in  the  state,  munici- 
pal, county,  and  teaching  services  of  Illinois,  listed  by  the  classes  of 
the  employes  respectively  concerned  and  given  in  the  order  of  the 
original  legislation,  are  as  follows: 

(1)  Chicago   Policemen— 1874.     (1874  and   1877— general;    1887— 

cities  50,000  and  over;  1915—200,000  and  over.) 

(2)  Chicago   Firemen— 1874.     (1874    and     1877— general;     1887— 

cities  50,000  and  over;  1917—200,000  and  over.) 

(3)  Policemen  in  Cities  of  5,000  to  100,000—1874.     (1874  and  1877 

—general;  1887—50,000  and  over;  1909—20,000  to  50,000; 
1913—9,000  to  50,000;  1917—5,000  to  100,000.) 

(4)  Policemen  in  Cities  of  100,000  to  200,000—1874.     (1874  and 

1877— general;  1887—50,000  and  over;  1915— cities  over  200,- 
000  put  under  another  law;  1917— cities  from  5,000  to  100,- 
000  put  under  another  law.) 

(5)  Firemen  in  Cities  of  5,000  to  200,000—1874.     (1874  and  1877 

—general;  1887—50,000  and  over;  1907—5,000  and  over; 
1917_5,000  to  200,000.) 

(6)  Chicago  Teachers — 1895.     (Separate  from  public  school  em- 

ployes since   1903.) 

(7)  Chicago    Public    School    Employes — 1895.     (Separate    from 

teachers  since   1903.) 

(8)  Chicago  Public  Library  Employes — 1905. 

(9)  Chicago  Municipal  Employes — 1911. 

(10)  Chicago  House  of  Correction  Employes — 1911. 

(11)  Chicago  Park  Policemen— 191 1.- 

(12)  Peoria  Teachers— 1911. 

(13)  State  Teachers — 1915.     (Optional  law  for  school  districts  of 

1,000  to  100,000  from  1911  to  1915.) 

(14)  Cook  County  Employes — 1915.    ' 

(15)  State  Institutions'  Teachers— 1917. 

Legislators  Receive  Petitions  for  Pension  Legislation  at  Session 
After  Session 

From  the  employes  interested  in  the  funds  under  these  pension 
laws,  there  come  to  the  General  Assembly  at  each  biennial  session  a 
great  variety  of  petitions  requiring  for  expeditious  and  proper  con- 
sideration a  well-defined  pension  policy  and  also  the  figures  resulting 
from  complex  and  intricate  actuarial  calculations.  In  view  of  the 
present  condition  of  the  pension  laws,  these  petitions  place  the  General 
Assembly  in  a  very  trying  position.  They  create  at  each  session  an 
acute  situation  on  pension  legislation.  They  ordinarily  look  to  an 
extension  of  benefits  under  the  law.  The  kinds  of  changes  sought  are : 
(1)  To  increase  the  classes  of  beneficiaries.  (2)  To  lower  the  age 
for  retirement  on  pensions.  (3)  To  increase  the  amount  of  pensions. 
Often  no  accompanying  provision  for  meeting  the  cost  of  the  extended 
benefit  is  proposed.  Such  extensions  are  an  abuse  in  that  they  create 
new  liabilities,  involving  for  the  pension  system  concerned:  (1)  A 
diversion  of  funds  from  the  purposes  for  which  they  were  originally 


8  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

contributed;  and  (2)  An  increase  in  the  discrepancy  between  its  assets 
and  liabilities. 

Other  petitions  come  to  the  Legislature  at  each  session  for  one  or 
more  groups  of  employes  in  branches  of  the  public  service  where 
pension  systems  have  not  been  introduced. 

.Hitherto  the  General  Assembly  has  had  no  accepted  standard 
for  use  in  judging  these  proposals.  The  Commission  hopes  that  the 
proposed  Standard  Plan  will  fill  this  lack. 

Larger  Aspects  of  the  Pension  Problem 

Even  if  the  Legislature  did  not  receive  requests  for  pension 
legislation,  the  State  would  still  have  a  pension  problem.  It  grows 
out  of  underlying  economic  conditions.  Fundamentally,  the  pension 
problem  for  the  State  is  that  of  providing  a  sound  system  to  meet  the 
three  hazards  of  old-age  inefficiency,  death,  and  disability,  as  those 
hazards  affect  the  public  employes,  their  families,  and  the  public  ser- 
vice. For  the  public  as  an  employer,  the  problem  is  to  promote  effi- 
ciency in  the  service  by  making  provision  not  only  for  continuity  in 
employment,  but  also  for  the  retirement  of  employes  when  overtaken 
by  old-age  inefficiency  or  by  disability  during  their  earlier  years.  Econ- 
omically, the  problem  is  to  assure  that  during  the  productive  years 
of  the  employe's  service  there  shall  be  laid  aside  on  'his  behalf  the 
amounts  that  may  be  required  during  his  non-productive  period  for 
the  needs  of  himself  and  his  wife  and  children,  or  parents,  dependent 
on  him  for  support.  For  the  State  as  a  promoter  of  the  general  wel- 
fare, the  pension  problem  is  to  construct,  for  its  own  employes,  a 
pension  system  that  will  serve  as  a  model  for  the  needs  of  the  employes 
of  privately  owned  industrial  and  business  organizations. 

However,  the  existing  legislation  registers  the  fact  that  it  has 
become  the  public  policy  of  Illinois  to  provide  pension  systems  for 
public  employes  having  tenure  in  the  service  during  good  behavior 
and  efficiency.  The  immediate  problem  for  our  State  is  not  the  intro- 
duction of  pension  systems  for  public  employes,  but  the  reconstruction 
of  existing  systems  on  a  sound  and  just  basis.  This  is  required  so 
that  there  will  not  be  a  recurring  need  to  amend  the  pension  laws  at 
each  succeeding  session  of  the  Legislature.  It  is  required  above  all 
to  assure  the  permanence  of  the  pension  funds. 

The  Commission  has  accordingly  concentrated  on  constructing  A 
Standard  Plan  for  a  Comprehensive,  Permanent  System  of  Funds 
for  Old-Age  Retirement  Annuities,  Life  Insurance  Convertible  Into 
Widows'  Annuities,  and  Sickness  and  Accident  Insurance. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  9 

Some  of  the  Principal  Features  of  the  Proposed  Standard  Plan 

The  central  feature  of  the  proposed  Standard  Plan  is  that  under 
it  there  would  be  accumulated  for  each  employe  during  his  years 
of  service  and  on  the  basis  of  his  age  at  entrance,  an  amount  sufficient 
to  provide  for  him,  when  he  reaches  an  age  called  the  standard  age 
of  retirement,  an  annuity  for  the  remaining  years  of  his  life  of  an 
amount  equal  to  a  definite  percentage  of  his  highest  salary.  These 
accumulations  would  accrue  from  contributions  made  by  the  public  as 
employer  and  by  the  employe,  at  a  fixed  ratio. 

Annuities  for  widows  of  employes  dying  before  attaining  the 
standard  age  of  retirement,  and  survivorship  annuities  to  be  available 
for  widows  of  employes  dying  after  that  age,  would  also  be  provided. 
This  would  be  done  in  part  through  conversion  of  the  accumulations 
for  old-age  retirement  annuity  and  in  part  through, life  insurance 
provided  under  the  Standard  Plan.  This  life  insurance  in  amount 
definitely  related  to  the  employe's  salary  would  be  in  force  throughout 
his  service  and  would  be  paid  up  at  the  standard  age  of  retirement. 
But  the  life  insurance  feature  would  be  optional  for  all  women  em- 
ployes and  for  male  employes  not  paid  on  a  yearly  basis.  In  the  event 
of  an  insured  employe's  death  before  attainment  of  the  standard  age 
of  retirement,  the  widow's  annuity  would  be  provided  from  three 
sources:  (1)  his  life  insurance;  (2)  the  accumulations  from  his  own 
contributions  for  old-age  retirement  annuity;  and  (3)  the  accumula- 
tions .from  the  contributions  by  the  public  as  an  employer  on  his 
Behalf  for  old-age  annuity — the  third  source  to  be  drawn  upon  only 
in  case  the  amounts  from  the  first  two  sources  are  not  sufficient  to 
provide  the  standard  amount  of  annuity  for  the  widow>  The  sur- 
vivorship annuity,  of  an  amount  to  be  determined  at  the  employe's 
attainment  of  the  standard  age  of  retirement  and  on  the  basis  of  the 
age  of  his  wife,  would  be  provided  solely  by  the  accumulations  for  his 
life  insurance.  The  amount  oft  the  survivorship  annuity  would  be 
determined  in  relation  to  a  standard  based  on  the  normal  difference 
in  ages  of  a  husband  and  wife,  and  a  definite  percentage  of  the  em- 
ploye's highest  salary. 

Under  this  plan  reserves  would  be  accumulated  from  contribu- 
tions and  interest  so  that  when  annuities  promised  at  either  the  retire- 
ment or  the  death  of  an  employe  fall  due,  the  money  would  be  on 
hand  to  pay  for  them.  In  this  way  public  employes'  pension  funds, 
so  far  as  their  main  purposes  are  concerned,  would  be  put  on  the 
basis  on  which  legal  reserve  life  insurance  under  state  regulation  has 
been  permanently  established. 


10  ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 

This  can  be  done  with  certainty  through  the  practical  application 
of  actuarial  science.  The  average  expectation  of  life  of  persons  arriv- 
ing at  a  given  age  is  known  from  well-established  tables  of  mortality. 
The  actuaries  can  tell  the  amount  that  must  be  on  hand  at  a  given 
retirement  age  for  each  one  in  a  large  group,  where  the  law  of  averages 
applies,  so  that  each  can  be  assured  of  getting  an  annuity  of  a  certain 
percentage  of  his  salary  for  the  rest  of  his  life. 

The  Plan  makes  provision  for  retirement  or  withdrawal  from  the 
service  under  a  variety  of  conditions  other  than  the  standard  condi- 
tions. It  would  authorize  an  employe  arriving  at  an  age  called  the 
minimum  age  of  retirement — five  years  below  the  standard  age  of 
retirement — to  retire  on*  an  annuity  of  such  an  amount  as  the  reserves 
to  his  credit  would  provide.  Moreover,  an  employe  leaving  the  service 
after  ten  years  of  service  could  let  his  contributions  and  those  of  the 
public  on  his  behalf,  remain  in  the  fund  until  he  reached  the  minimum 
age  of  retirement,  when  he  could  claim  certain  equitable  retirement 
benefits.  Likewise,  on  leaving  the  service  he  would  be  permitted  to 
conserve  his  interest  in  the  life  insurance  accumulations  under  the  Plan. 

Furthermore,  while  the  Plan  makes  contributions  compulsory,  it 
provides   complete  refund  rights  as   to  each  employe's   contributions 
for  old-age  retirement  annuity  and  for  life  insurance  in  case  he  leaves 
the  service  at  any  time  for  any  cause. 
Present  Pensions  Assured  to  Present  Employes  and  Pensioners 

This  plan  has  been  worked  out  in  the  first  instance  for  future 
entrants ;  that  is,  for  employes  entering  the  service  after  it  takes  effect. 
Then  it  has  been  modified  for  the  present  employes.  For  them  it  pro- 
vides that  the  public  as  an  employer  should  make  up  the  contributions 
that  would  have  been  made  by  the  public  on  the  basis  of  their  respec- 
tive ages  at  entrance  had  the  Plan  been  in  effect  throughout  their  ser- 
vice. It  would  require  the  present  employe  to  contribute  under  its 
terms.  But  it  provides  that  if  his  age  is  such  that  his  contributions 
plus  those  of  the  public  would  not  provide  him  accumulations  sufficient 
to  yield  a  pension  equal  to  that  which  he  would  be  entitled  to  under  his 
present  pension  law  on  attaining  the  minimum  age  of  retirement,  he 
would  be  guaranteed  the  pension  promised  him  under  the  present  law. 
Present  pensioners  also  would  receive  their  present  pensions. 

The  Plan  furthermore  calls  for  disability  benefits.  It  provides 
for  extra  compensation  by  the  employer  to  the  employe  disabled 
directly  as  a  result  of  the  performance  of  duty.  It  also  calls  for  sick- 
ness and  accident  insurance,  to  be  provided  jointly  by  the  employes 
and  the  public  as  an  employer,  for  the  present  on  an  annual  assess- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  11 

ment  basis,  although  it  ultimately  looks  to  having  a  reserve  system 
also  for  this  feature. 

Commission  Meetings  and  Public  Hearings  Held 

In  working  out  the  Standard  Plan  and  its  recommendations,  the 
Commission,  since  its  appointment  by  the  Governor,  on  December  19, 
1917,  has  held  eighty-six  meetings.  Many  of  these  lasted  for  eight 
hours. 

Two  series  of  public  hearings  were  also  held,  subsequent  to  the 
eightieth  meeting.  A  "Special  Preliminary  Statement"  in  pamphlet 
form  was,  as  it  announced  on  its  cover,  "issued  as  a  basis  for  public 
hearings  for  citizens,  public  employes  and  public  officials  on  the  pro- 
posed Standard  Plan  for  a  comprehensive  and  permanent  system  of 
pension  funds."  This  pamphlet  embraced  Chapters  II,  III,  and  IV, 
of  the  present  report.  It  also  included  an  introductory  statement. 
This  said  that  the  Commission,  before  perfecting  its  conclusions  and 
submitting  its  final  report  to  the  Governor,  for  transmission  to  the 
General  Assembly,  desired  to  secure  from  citizens,  public  employes 
and  public  officials  "any  constructive  criticisms  they  may  have  to  offer 
on  the  proposed  plan." 

Four  evening  hearings  were  held  for  those  interested  in  pension 
funds  in  Chicago.  Four  hearings  extending  through  a  Saturday  fore- 
noon and  afternoon  were  held  for  those  interested  in  pension  funds 
outside  of  Chicago.  A  special  evening  hearing  was  also  held  on  a 
proposed  pension  fund  for  park,  employes  other  than  policemen  in 
the  large  park  systems  in  Chicago.  These  hearings  were  held,  through 
the  courtesy  of  the  Chicago  public  school  authorities,  in  the  meeting 
room  of  the  Chicago  Board  of  Education.  All  of  the  hearings  were 
well  attended. 

All  criticisms  and  suggestions  received  at  these  hearings,  and  at 
other  times,  were  carefully  considered  by  the  Commission,  and  several 
important  changes  were  made  in  'the  Standard  Plan,  before  completing 
this  report. 

Wide  Demand  for  Information  on  Reserve  System 

One  result  of  the  hearings  was  the  awakening  of  a  statewide 
interest  in  the  subject  of  an  actuarially  sound  pension  plan.  Although 
the  Commission  issued  a  large  edition  of  the  Special  Preliminary 
Statement,  it  has  received  so  many  requests  for  copies  that  it  could 
not  meet  the  demand  for  them.  An  incidental  recommendation  of  the 
Commission  is  that  the  General  Assembly  provide  further  for  the 
dissemination  of  information  concerning  a  sound  pension  system. 


12  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

It  would  be  desirable  for  those  interested  to  read  in  connection 
with  this  report,  the  report  of  the  Pension  Laws  Commission  of  1916, 
which  shows  minutely  the  insolvency,  as  of  January  1,  1916,  of  the 
pension  funds  in  Illinois.  We  are  advised  by  the  Secretary  of  State 
that  there  are  in  his  department  many  copies  of  the  report  of  the 
Pension  Laws  Commission  of  1916  and  that  he  will  cheerfully  send 
copies  to  interested  inquirers. 

State  Regulation  of  Private  Pension  Funds  Discussed 

The  Commission,  incidental  to  a  chapter  on  industrial  and  institu- 
tional pension  systems,  submits  a  recommendation  for  consideration 
of  state  regulation  of  pension  funds  of  industrial,  mercantile,  financial, 
and  public  utility  corporations  so  as  to  require  the  accumulation  of 
reserves  for  the  pension  benefits  promised  under  those  funds.  This 
looks  toward  the  day  when  there  may  be  a  universal  system  of  pension 
funds  for  all  employes,  public  and  private,  under  which  every  employe 
would  have  accumulations  in  some  pension  fund  with  a  right  to  transfer 
his  reserves  to  any  other  fund  in  case  of  transfer  from  one  employment 
to  another.  The  Commission  recommends,  however,  that  the  probable 
remoteness  of  such  an  accomplishment  should  not  be  permitted  to  stand 
in  the  way  of  the  immediate  reconstruction  of  the  pension  funds  of 
Illinois  for  public  employes  along  the  lines  of  the  proposed  Standard 
Plan. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  13 


CHAPTER  II 


MEMORANDUM  ON  FINDINGS  AND  CONSTRUC- 
TIVE RECOMMENDATIONS  OF  THE 
ILLINOIS  PENSION  LAWS 
COMMISSION 


SUBSTANTIALLY  AS  SUBMITTED  TO  THE  GOVERNOR, 

IN  RESPONSE  TO  HIS  REQUEST,  BY  ORDER  OF 

THE  COMMISSION,  DECEMBER  14,   1918 


Pension  Funds  Under  Fifteen  Present  Laws  Are  Insolvent 

The  insolvency  of  the  pension  funds  under  the  fifteen  pension 
laws  of  Illinois  for  teachers,  policemen,  firemen,  and  other  civil  service 
employes,  is  a  matter  of  grave  concern.  These  acts  have  been  built 
up  blindly.  The  liabilities  under  them  have  crept  up  almost  imper- 
ceptibly, as  the  service  given  by  the  public  as  an  employer  has  ex- 
panded. Through  these  laws  the  state  and  many  of  its  municipalities 
today  are  in  effect  in  the  position  of  holding  out  dishonest  promises  to 
the  men  and  women  in  the  employ  of  the  public.  On  the  basis  of  lack 
of  provision  to  finance  pensions  promised,  the  major  existing  funds 
have  deficiencies  running  up  into  the  millions. 

Even  when  credit  is  given  for  the  perpetual  continuance  of  receipts 
from  taxation  as  at  present,  the  deficit  of  the  policemen's  fund  of 
Chicago  is  $21,000,000,  and  that  of  the  firemen's  fund  $7,000,000. 

When  present  employes  and  present  pensioners  are  considered, 
the  deficit  on  the  Chicago  Teachers'  fund  is  about  $6,000,000,*  and 
that  of  the  Municipal  employes  about  $5,000,000.** 

The  statewide  public  school  teachers'  fund  similarly  is  headed 
in  the  direction  of  a  large  deficit.  The  police  and  fire  funds  of  the 
cities  outside  of  Chicago  are  too  small  to  be  sound  financially. 

Under  existing  plans,  the  funds  contributed  by  the  employe  and 
by  the  public  on  behalf  of  an  employe  are  not  allocated  to  be  held  for 
the  benefit  of  such  employe  upon  his  fulfillment  of  the  conditions 


*See  Report  of  Illinois  Pension  Laws  Commission  of  1916,  Page  146; 
and  Page  134  for  effect  of  future  entrants  in  reducing  the  deficit. 

**See  Page  232  this  Report  for  assumptions  as  to  ages  of  retirement  and 
for  effect  of  future  entrants  in  reducing  the  deficit. 


14  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

entitling  him  to  a  pension.  The  contributions  are  thrown  together 
without  regard  to  the  equities  of  the  individual.  This  way  of  financing 
a  pension  system  whose  promises  run  many  years  into  the  future  is 
unsafe  from  the  standpoint  of  security  and  solvency  of  the  system. 
Thus  it  is  not  only  the  present  financial  condition  of  the  funds  that 
should  be  considered  but  the  fact  that  the  fundamentals  of  the  plan 
of  financing  are  unsound  from  the  standpoint  of  keeping  the  funds 
solvent,  even  if  they  should  be  put  into  a  solvent  condition  at  a  par- 
ticular time. 

Situation  Calls  for  Three  Kinds  of  Insurance  in  One  System 

Three  hazards  are  dealt  with  in  some  fashion,  each  either  in  all 
or  in  some  of  the  existing  pension  laws,  namely:  (1)  old-age  in- 
efficiency; (2)  death;  and  (3)  disability  from  sickness  and  acci- 
dent. The  situation  they  reflect  calls  for  three  classes  of  insurance: 
(1)  old-age  retirement  annuities;  (2)  life  insurance  primarily  to  pro- 
vide annuities  for  widows;  and  (3)  sickness  and  accident  insurance. 

Furthermore,  it  calls  for  provisions  on  each  of  these  three  sub- 
jects for  both  employes  entering  the  service  in  the  future,  on  whose 
behalf  an  ideal  plan  could  be  worked  out  readily  on  a  sound  basis, 
and  also  for  present  employes,  on  whose  account  there  are  huge 
accrued  liabilities.  Both  the  problem  of  dovetailing  the  three  kinds 
of  insurance  and  the  problem  of  fitting  together  the  provisions  for 
present  employes  and  future  entrants,  are  technical  and  intricate. 
Commission  Strives  to  Deal  With  Problem  in  a  Broad  Way 

The  Illinois  Pension  Laws  Commission  of  1918,  appointed  by 
the  Governor,  pursuant  to  an  act  of  the  last  General  Assembly,  has 
worked  persistently,  having  held  some  seventy  prolonged  sessions 
during  the  past  year,  in  an  effort  to  build  a  constructive  plan  for 
the  solution  of  this  complex  and  pressing  problem.  It  has  built  on 
the  foundation  laid  by  the  investigations  of  the  Pension  Laws  Com- 
mission of  1916.  The  Commission  has  brought  to  its  task  a  com- 
posite point  of  view,  as  called  for  by  the  act,  made  up  from  the  re- 
spective standpoints  of  its  lawyer-chairman,  financier,  employe  and 
actuary  members.  The  Commission  was  assisted  by  a  professional 
insurance  actuary  serving  as  its  staff  actuary,  by  an  efficiency-engi- 
neering-staff-member serving  as  its  secretary,  and  by  special  counsel 
appointed  by  the  Attorney  General. 

The  Commission  has  endeavored  to  look  at  the  problem  in  a 
broad  way.  It  has  looked  at  the  problem  as  one  involving  the  pro- 
motion of  efficiency  in  the  service  of  the  public  as  an  employer,  as 
one  comprising  a  subdivision  of  the  general  problem  of  democracy 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  15 

in  the  adjustment  of  the  relations  of  employer  and  employe  in  or- 
ganized industry,  and  as  one  whose  solution  will  further  the  wide- 
spread movement  for  social  insurance  and  will  in  many  ways  con- 
tribute substantially  to  the  public  welfare.  In  rounding  up  the  work 
on  its  report,  the  Commission  has  deemed  the  atmosphere  of  re- 
construction days  after  the  great  war  for  democracy  as  especially 
favorable  to  the  fruition  of  its  work. 

Recommends    Standard   Plan   for   Combined,    Comprehensive   and 
Permanent  Annuity  and  Insurance  System 

The  Commission  recommends  the  enactment  of  a  law  or  code 
for  "A  Standard  Plan  for  a  Comprehensive  and  Permanent,  Con- 
solidated System  for  Old-age  Retirement  Annuities,  Life  Insurance 
Providing  Widows'  Annuities,  and  Sickness  and  Accident  Insurance 
for  Employes  of  the  Public  in  Illinois." 

Six  of  the  great  objectives  in  such  a  move  would  be:  (1)  to  re- 
organize all  existing  pension  funds  so  as  to  put  them  on  a  sound  and 
secure  financial  basis;  (2)  to  provide  both  a  standard  for  future  pen- 
sion legislation  and  a  consolidated  system  to  which  any  new  fund 
could  be  joined  at  the  outset;  (3)  to  extend  the  -opportunity  of  par- 
ticipating in  the  system  to  members  of  small  groups  of  employes; 

(4)  to  reduce  to  a  minimum  the  tendency  to  change  the  pension  laws 
and  benefits  at  the  sessions  of  each  succeeding  General  Assembly; 

(5)  to  provide  efficient  administration  in  which  the  public  and   its 
employes  will  co-operate,  and  also  state  supervision  of  the  affairs  of 
all  the  funds  in  the  system,  so  as  to  insure  proper  care  of  moneys 
and  property,  safe  investments,  and  correct  disbursements ;  and   (6) 
to  protect  individual  equities  and  to  make  certain  the  realization  of 
promised  benefits. 

Actuarial  Science  Shows  Balance  Sheet  for  the  Future 

All  this  is  possible  through  the  help  of  actuarial  science.  The 
Commission,  therefore,  has  rejied  much  on  actuaries,  whose  pro- 
fession it  is  to  make  practical  application  of  the  science  of  mathe- 
matics to  interpreting  mortality  tables  and  determining  the  probable 
average  length  of  life  for  individuals  of  different  age  groups — in 
short,  to  calculating  risks.  For  example,  from  the  American  Ex- 
perience Table  of  Mortality,  in  common  use  by  legal  reserve  life  in- 
surance companies  under  the  regulation  of  the  State,  it  is  calculated 
that  33  per  cent  of  the  employes  entering  the  service  at  age  30  will 
die  before  reaching  age  60,  or  that  67  per  cent  will  live  to  age  60, 
which  may  be  regarded  as  the  normal,  age  when  old-age  inefficiency 
begins  to  be  felt.  According  to  the  same  table,  the  average  length  of 


16  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

life  still  to  be  enjoyed  by  those  living  at  age  60  is  somewhat  more 
than  14  years. 

The  actuaries  calculate  that  it  takes  $6060.60  on  hand  for  each 
employe  retiring  at  age  60  to  provide  him  an  annuity  of  $600  a  year. 
This  calculation  is  on  the  basis  of  the  above  named  table  of  mortality 
and  4  per  cent  interest.  In  the  same  way  they  show  that  it  takes 
$626.92  to  provide  paid-up  life  insurance  of  $1000  at  age  60.  This 
is  on  the  basis  of  that  table  and  3*/2  per  cent  interest.  They  also  cal- 
culate the  reserves  needed  to  equalize  insurance  payments  between 
youth  and  old-age  to  keep  in  force  a  given  amount  of  life  insurance. 
Finally  they  calculate  the  annual  instalments  required  as  payments 
throughout  the  period  of  service  to  provide  the  funds  needed  to  pay 
all  of  the  benefits  that  are  promised  to  the  respective  beneficiaries. 

Consequently,  it  is  practical  to  have  a  balance  sheet  for  the 
future  of  the  whole  system. 

Reserve  Basis,  the  Outstanding  Feature  of  the  Standard  Plan 

The  Standard  Plan  proposed  by  the  Commission  is  what  the 
actuaries  and  other  insurance  men  call  a  reserve  plan.  It  calls  for 
the  accumulation  of  funds  toward  old-age  retirement  annuities,  and 
toward  life  insurance  for  widows'  annuities,  from  year  to  year  while 
service  is  being  rendered,  and  while  these  liabilities  which  will  mature 
in  the  future  are  being  incurred.  It  requires  that  these  accumula- 
tions be  sufficient  in  amount  to  provide  the  reserves  necessary  to  pay 
the  annuities  when  promised.  It  also  provides  for  sickness  and  acci- 
dent insurance  on  a  yearly-contribution  basis,  but  looks  to  the  time 
when  the  experience  statistics  will  afford  a  guide  to  a  reserve  basis 
for  this  risk  as  well  as  the  others. 

The  plan  joins  provisions  for  the  various  benefits  in  the  same 
chain.  This  can  be  done  by  reason  of  the  fact  that  the  sum  ac- 
cumulated towards  the  reserve  for  the  old-age  retirement  annuity  of 
a  given  employe,  together  with  the  amount  yielded  by  his  life  insur- 
ance, may  be  converted  into  a  reserve  to  use  for  a  widow's  an- 
nuity, including  in  some  cases  a  survivorship  annuity,  without  any 
harm  to  the  interests  of  any  other  employe. 

The  Standard  Plan  calls  for  the  keeping  of  individual  accounts 
as  to  each  employe.  It  requires  that  the  reserves  for  the  annuities 
and  life  insurance  for  each  employe  shall  be  accumulated  on  the  basis 
of  his  age  at  entrance  with  relation  to  a  table  of  mortality  to  be 
described  in  the  act,  and  at  prescribed  rates  of  interest. 

All  this  is  in  contrast  witlj  the  provisions  of  the  existing  pension 
systems  which  merely  provide  for  the  payment  of  the  pensions  as 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  17 

they   fall   due  by  means   of   expected  annual   appropriations   against 
tax  levies  and  by  means  of  deductions  from  the  employes'  salaries. 
Scale  of  Benefits  Under  the  Standard  Plan 

The  old-age  retirement  annuities  and  the  paid-up  life  insurance 
would  be  provided  in  the  typical  case  under  the  Standard  Plan  at  an 
age  called  the  standard  age  of  retirement.  This  is  fixed  at  60  years 
in  most  of  the  occupations  and  at  55  years  in  the  police  and  fire  serv- 
ices. Provision  also  is  made  for  giving  retirement  annuities  on  the 
basis  of  what  the  accumulated  funds  will  provide,  at  an  age  five 
.  years  lower  than  the  standard  age  of  retirement  and  called  the  mini- 
mum age  of  retirement.  Other  variations  based  on  varying  -condi- 
tions are  also  proposed,  with  a  view  to  meeting  all  the  important 
classes  of  cases  that  are  possible.  But  these  variations  exclude  in- 
creases in  the  amount  of  annuity  for  employes  staying  in  the  serv- 
ice after  the  standard  age  of  retirement,  the  object  being  to  en- 
courage the  actual  retirement  of  aged  employes  when  their  efficiency 
has  declined  below  the  standard  of  youth  and  middle  age. 

The  proposed  amount  of  the  retirement  annuities  in  the  typical 
case  would  be  40  per  cent  of  the  employe's  final  salary,  except  that 
for  policemen  and  firemen  it  would  be  50  per  cent  of  final  salary. 
But  any  salary  above  $2500  would  not  be  counted  in  any  connection 
under  the  system. 

The  amount  of  the  life  insurance  benefit  would  be  equal  to  1^4 
years'  salary  for  policemen  and  firemen  and  \l/4  years'  salary  for 
other  employes,  it  being  left  optional  for  women  in  the  service  and  for 
employes  not  paid  on  an  annual  basis  to  take  insurance  in  the  sys- 
tem. This  is  paid-up  life  insurance  at  the  standard  age  of  retire- 
ment. The  feature  of  relating  the  life  insurance  to  the  year's  salary 
and  of  having  it  paid  up  at  the  standard  age  of  retirement  is  unique. 

Widows'  annuities,  widows'  survivorship  annuities,  and  chil- 
dren's annuities  are  provided  for  under  the  plan.  The  differences  be- 
tween widows'  annuities  and  widows'  survivorship  annuities  form  a 
contrast  which  has  been  kept  in  mind.  The  widow's  annuity  is  one 
as  to  which  the  amount  of  the  annuity  is  settled  after  the  employe's 
death.  The  widow's  survivorship  annuity,  in  contrast  to  this,  in- 
volves benefits  in  amounts  which  are  settled  while  both  husband  and 
wife  are  alive — one  amount  to  be  paid  annually  to  the  husband  until 
his  death,  and  another  amount  to  be  paid  to  the  widow  annually  dur- 
ing her  life  in  case  she  survives  him. 

One  feature  of  the  provisions  of  the  plan  is  that  in  the  event 
of  the  death  of  an  employe  before  attaining  the  standard  age  of  re- 


18  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-191$ 

tirement,  the  widow,  in  the  case,  which  is  average  as  to  the  relative 
ages  of  husband  and  wife,  gets  an  annuity  in  amounts  running  up 
to  one-fourth  of  her  husband's  salary  if  he  was  a  fireman  or  police- 
man, and  to  one-fifth  of  his  salary  if  he  was  an  employe  of  any  other 
class. 

Another  feature  is  that  the  amount  of  life  insurance  for  the 
employe  is  such  that  when  his  life  insurance  certificate  is  surrendered 
at  the  standard  age  of  retirement  its  cash  value  will  provide  a  sur- 
vivorship annuity,  in  the  average  case,  amounting  to  approximately 
25  per  cent  of  the  salary  in  the  case  of  firemen  and  policemen,  and 
20  per  cent  of  salary  in  the  case  of  other  employes. 

Benefits  on  account  of  disability  from  sickness  or  accident  are 
provided  for  by  the  plan,  but  in  the  case  of  disability  or  death  re- 
sulting from  the  performance  of  duty,  are  duly  discounted  by  such 
amounts  as  are  secured  from  the  public  as  an  employer  under  the 
Workmen's  Compensation  Act.  In  the  case  of  ordinary  disability 
from  sickness  or  accident,  these  benefits  amount  to  about  25  per  cent 
of  salary;  in  the  case  of  disability  from  the  performance  of  duty, 
the  amounts  range  from  over  69  to  over  94  per  cent  of  salary. 

Contributions  by  Employes  and  by  Public  as  Employer 

The  money  with  which  to  pay  all  these  annuities  and  other  bene- 
fits would  be  raised  through  regular  monthly  contributions  by  the 
respective  employes  and  by  the  public  as  employer,  through  the  State 
and  the  respective  municipal  corporations  and  other  subdivisions  of 
Government  managing  the  service.  To  these  contributions  would 
be  added  interest,  compounded  annually. 

The  plan  of  contributions  would  be  compulsory.  The  contri- 
butions of  the  employes  would  take  the  form  of  actual  deductions 
from  current  salary.  This  would  be  a  condition  of  the  contract  of 
employment.  The  contributions  by  the  public  would  be  amounts 
equal  to  certain  percentages  of  the  respective  employes'  salaries. 
The  total  percentage  of  salary  thus  contributed  by  and  on  behalf  of 
each  employe  toward  old-age  retirement  annuities  and  toward  life 
insurance,  would  depend  on  his  age  at  entrance  to  the  service. 
However,  limitations  are  set  on  the  employe's  contributions.  These 
limitations  are  put  at  4  per  cent  on  account  of  retirement  annuities 
and  2  per  cent  on  account  of  life  insurance.  The  Commission  finds 
that  this  is  all  that  it  would  seem  wise  or  fair  to  require  the  employes 
to  set  aside  from  their  current  salaries  under  this  system  for  com- 
pulsory savings.  Then  it  finds  that  theoretically  a  ratio  of  one  to 
one  as  between  the  contributions  by  the  public  as  employer  and  by 


ILLINOIS  PENSION  L*AWS  COMMISSION,  1918-1919  19 

the  employe,  under  a  system  administered  on  a  cooperative  basis, 
would  seem  ideal.  But  the  Commission  recognizes  that  as  a  prac- 
tical matter,  in  order  to  provide  retirement  annuities  sufficient  to 
meet  the  needs  of  the  service,  a  different  ratio  is  needed.  The  Stan- 
dard Plan  provides,  therefore,  that  the  public's  contribution  toward 
retirement  annuities  would  be  at  the  ratio  of  three  to  one  in  the  case 
of  the  hazardous  services — those  of  the  policemen  and  firemen,  and 
at  the  ratio  of  two  to  one  in  the  case  of  the  other  civil  service  em- 
ployes and  the  public  school  teachers.  The  ratio  of  one  to  one  is 
provided  as  to  the  contributions  for  life  insurance  and  sickness  and 
accident  insurance. 
Refunds  Are  Provided 

Refunds  to  employes  withdrawing  from  the  service  through 
resignation  or  dismissal  are  provided  for  fully.  In  every  case  an 
employe,  or  his  heirs  in  case  of  his  death,  would  ultimately  receive 
either  in  benefits  or  refunds  every  cent  that  the  public  requires  him 
to  contribute  under  the  system. 

Special  Provisions  for  Extending  the  Standard  Plan  to  Present 
Employes  and  Present  Pensioners 

The  foregoing  provisions  of  the  Standard  Plan  both  as  to  bene- 
fits and  financing  were  worked  out  by  the  Commission  for  the  em- 
ployes who  enter  the  service  after  the  plan  is  put  in  force — that  is, 
for  future  entrants,  on  whose  account  the  system  starts  out  new, 
without  any  liabilities.  These  would  apply  readily  to  the  present 
employes  who  have  been  in  the  service  for  a  comparatively  limited 
number  of  years.  But  for  the  older  present  employes,  especially  for 
those  who  have  been  in  the  service  for  many  years,  there  would  be 
large  accrued  liabilities.  These  would  be  both  actual  liabilities  under 
present  laws  on  account  of  the  respective  employes  in  existing  funds, 
and  potential  liabilities  from  the  application  of  the  benefit  provisions 
of  the  Standard  Plan  to  employes  whose  ages  and  years  in  the  service 
are  such  that  it  is  now  no  longer  possible  for  them  to  contribute  dur- 
ing any  considerable  period  towards  old-age  retirement  annuities  or 
life  insurance.  However,  the  Standard  Plan  would  give  to  the  pres- 
ent employes,  in  so  far  as  contributions  by  -the  employer  are  con- 
cerned, the  same  scale  of  benefits  in  relation  to  final  salary  as  that 
provided  for  future  entrants.  That  is,  the  public  would  treat  all 
the  employes  alike  in  its  contributions. 

The  plan  would  apply  to  the  present  employes  so  far  as  pos- 
sible the  same  rates  of  required  contributions  as  to  new  entrants,  with 
the  same  limitation  of  4  per  cent  on  contributions  for  old-age  re- 


20  ILLINOIS  PENSION  LAWS  COMMISSION.  1918-1919 

tirement  and  2  per  cent  for  life  insurance.  Then  the  employe  at  re- 
tirement would  receive  annuities  of  such  amounts  as  could  thus  be 
provided  by  the  combined  contributions  of  the  employer  and  him- 
self. However,  the  plan  includes  a  proviso,  giving  the  present  em- 
ploye who  has  been  a  contributor  to  one  of  the  superseded  pension 
funds  the  option  of  taking  instead  of  the  benefits  provided  in  the 
Standard  Plan  those  promised  in  the  old  act  under  which  he  has 
served,  and  perhaps  on  account  of  which  he  has  been  led  to  stay  in 
the  service  concerned.  This  option  would  run  to  taking  in  pension 
the  amount  prescribed  in  the  old  act,  except  that  he  would  not  be- 
come eligible  to  receive  such  a  pension  before  the  attainment  of  an  age 
designated  in  the  Standard  Plan  as  the  minimum  age  of  retirement. 

To  finance  these  benefits  for  the  present  employes,  the  money 
would  be  drawn  from  three  sources:  (1)  the  accumulation  from  past 
contributions  by  both  the  employes  and  the  public  to  the  existing 
pension  funds,  except  in  so  far  as  this  is  needed  to  provide  for  re- 
serves for  annuities  tp  present  pensioners  upon  the  rolls  of  the  re- 
spective funds;  (2)  future  contributions  of  the  present  employes  on 
the  basis  of  their  attained  ages,  with  special  provisions  permitting 
the  employe  if  he  remains  in  the  service  after  attaining  the  standard 
age  of  retirement,  to  continue  contributing  until  the  funds  accumu- 
lated are  sufficient  to  provide  the  same  annuities  for  himself  and 
his  wife  as  would  be  provided  in  the  case  of  a  future  entrant  of  like 
salary  and  period  of  service;  (3)  future  contributions  by  the  public 
as  employer,  including  supplementary  contributions  to  make  up  what 
the  employer  would  have  contributed  toward  old-age  retirement  an- 
nuity and  life  insurance  reserves  for  the  respective  employes  on  the 
basis  of  their  ages  from  the  time  they  entered  the  service  had  the 
standard  system  been  in  operation. 

In  order  to  prevent  the  burden  of  this  contribution  on  account 
of  a  deficit  arising  from  the  lack  of  a  reserve  system  hitherto  from 
falling  on  the  public  treasury  at  once,  the  Standard  Plan  would  call 
for  its  payment  by  the  appropriating  body  concerned  in  instalments 
running  over  a  long  period  of  years.  These  instalments  would  be 
specified  for  each  fund.  They  would  be  so  scheduled  that  after  a 
series  of  years  the  supplementary  funds  thus  required  would  be  fully 
raised,  on  hand  in  the  annuity  and  life  insurance  reserve  accounts, 
and  the  contributions  thereafter  would  be  all  purely  on  the  basis 
of  the  provisions  of  the  Standard  Plan  for  future  entrants.  * 

The  present  pensioners  in  each  of  the  existing  pension  funds 
would  be  provided  for  in  so  far  as  possible  out  of  the  assets  of  their 
own  fund  under  the  old  systems,  but  when  such  assets  are  insufficient 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  21 

the  pensioners  would  be  provided  for  from  a  prior  annuitant's  ac- 
•count  to  be  maintained  by  the  public  as  employer.  This  prior  an- 
nuitants' account  would  be  discontinued  when  the  assets  in  it  became 
equal  to  the  reserves  required  to  provide  life  annuities  for  the  present 
pensioners. 

Consolidation  of  Small  Funds,  Equalization  of  Risks,  Centralized 
Supervision  of  the  System 

All  of  these  benefits  could  not  be  financed  for  small  groups  of 
employes.  Each  fund  must  be  for  a  group  large  enough  for  the  law 
of  averages  to  apply.  Moreover,  the  risks  of  the  several  funds  should 
be  consolidated  to  the  extent  required  to  equalize  for  all  the  funds 
variations  from  the  average  in  mortality ;  for  example,  cases  of  un- 
usual length  of  life  of  those  on  pension. 

The  Standard  Plan,  therefore,  in  accord  with  the  tendency  of 
the  times,  recognizes  and  continues  the  consolidation  now  in  force  as 
between  local  school  districts  in  the  statewide  teachers'  pension  and 
retirement  system.  It  provides  for  more  consojidation  in  two  senses. 

First,  it  would  at  once  consolidate  various  existing  funds.  Out- 
side of  Chicago  it  would  consolidate  all  of.  the  policemen's  funds  in 
the  smaller  cities  into  one  statewide  policemen's  fund.  And  like- 
wise all  of  the  firemen's  funds  in  these  cities  into  a  statewide  fire- 
men's fund. 

In  the  same  manner  it  would  consolidate  the  police  funds  of 
the  three  p'ark  systems  of  Chicago  in  one  fund. 

It  would  provide  that  in  case  of  future  legislation  proposed  for 
the  civil  service  employes  other  than  policemen  and  firemen  in  the 
cities  outside  of  Chicago  they  should  be  provided  for  in  one  fund. 
The  same  would  hold  as  to  the  employes  of  the  same  classes  in  the 
three  park  systems  of  Chicago. 

Then,  again  immediately,  it  would  consolidate  with  the  Muni- 
cipal Employes'  Fund  of  Chicago,  three  small  funds  in  that  city — 
the  Public  Library  Employes'  Fund,  the  House  of  Correction  Em- 
ployes' Fund,  and  the  fund  of  the  Public  School  Employes  other 
than  teachers. 

Second,  the  big  consolidation  would  be  a  limited  consolidation 
of  the  risks  of  all  of  the  funds.  This  would  be  through  a  central 
state  supervising  board  which  would  serve  as  an  agency  for  the 
equalization  of  risks.  This  is  a  pioneer  feature  of  the  Standard  Plan. 

The  consolidated  funds  thus  to  be  joined  in  one  system  would 
be  of  two  main  classes — Metropolitan  and  Statewide. 


22  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

The  Metropolitan  funds  would  include  the  funds  in  Chicago — 
the  Public  School  Teachers'  Fund,  the  Municipal  Employes'  Fund; 
the  Firemen's  Fund,  the  Policemen's  Fund,  the  Cook  County  Em- 
ployes' Fund,  and  the  Park  Policemen's  Fund. 

The  Statewide  'funds  would  include  the  systems  for  services  out- 
side of  Chicago.  These  would  be  the  State  Teachers'  Pension  and 
Retirement  Fund,  the  Statewide  Policemen's  Fund,  and  the  State- 
wide Firemen's  Fund.  These  would  also  include  any  fund  that 
might  be  established  for  civil  service  employes  directly  in  the  em- 
ploy of  the  State. 

Administration  by  Representative  Local  Retirement  Boards  and  a 
Central  State  Supervising  Board 

For  each  of  the  big  funds — the  respective  Metropolitan  funds 
and  the  Statewide  funds — there  would  be  a  local  retirement  board. 
The  board  for  each  Chicago  fund  would  be  made  up  of  three  em- 
ployes to  be  elected  by  the  employes  concerned  and  two  citizens  to  be 
appointed  by  the  Mayor  with  the  approval  of  the  City  Council  of 
Chicago. 

The  board  for  each  Statewide  fund  would  be  made  up  of  three 
members  elected  by  the"  employes  concerned  and  two  citizens  ap- 
pointed by  the  Governor  with  the  approval  of  the  Senate. 

The  central  supervising  board  would  consist  of  three  members 
to  be  appointed  by  the  Governor  with  the  approval  of  the  Senate. 

Each  local  retirement  board  would  control  the  investment  of 
the  funds  contributed  under  its  system,  subject,  however,  to  ap- 
proval by  the  central  supervising  board.  Moreover,  the  funds  could 
be  invested  only  in  classes  of  safe  securities  specified  in  the  law. 

The  central  supervising  board  would  control  directly  the  in- 
vestment only  of  such  funds  as  would  be  turned  over  to  it  by  the 
local  boards  for  purposes  of  equalization  of  risks. 

The  respective  local  boards  would  carry  out  the  details  of  col- 
lecting the  contributions  from  and  on  behalf  of  the  employes  con- 
cerned, and  of  paying  the  benefits.  But  this  would  be  done  in  ac- 
cordance with  regulations  prescribed  by  the  central  supervising  board, 
which  would  have  powers  of  visitation,  investigation,  and  correction. 
The  local  boards  would  keep  records  and  make  reports  in  the  manner 
prescribed  by  the  central  supervising  board. 

Under  this  plan  administration  could  be  unified,  standardized, 
and  safeguarded. 

Besides  this  the  Standard  Plan  specifies  the  outlines  of  the  book- 
keeping system,  calling  for  twelve  specific  funds  to  be  kept  by  each 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  23 

local  retirement  board,  and  three  specific  funds  to  be  kept  by  the 
central  supervising  board.  It  stipulates  that  the  interest  accruing  on 
the  contributions  by  or  on  behalf  of  each  employe  shall  be  entered 
in  his  individual  account  at  least  once  a  year. 

Moreover,   it   calls    for   the   central   supervising   board   to   make 
actuarial   investigations  at   frequent  intervals   and   to   report  the   re- 
sults to  the  Governor,  for  publication  and  for  use  in  the  continued 
scientific  development  of  the  entire  consolidated  system. 
Actuarial  Reserve  Systems  Recently  Established  in  Other  States 

The  experience  of  New  York,  Massachusetts,  and  other  states 
and  countries  with  pension  systems  established,  in  the  dark  as  to 
future  costs  like  those  of  Illinois,  is  similar  to  that  of  our  State'. 
Their  funds  came  to  face  insolvency. 

In  recent  years  some  reserve  systems  similar  to  that  outlined 
for  each  of  the  Metropolitan  and  Statewide  funds  proposed  for 
Illinois  have  been  established  in  Massachusetts,  New  York,  and 
Pennsylvania.  So  there  is  precedent  for  the  foundations  of  the 
Standard  Plan  proposed  by  the  Commission. 
Supreme  Courts  Hold  Pension  Systems  Promote  Efficiency 

The  trend  of  the  opinions  of  the  Supreme  Court  of  Illinois  and 
of  the  Supreme  Courts  of  other  states,  as  shown  in  an  exhaustive  re- 
view of  the  judicial  decisions  on  civil  service  pensions  prepared  for 
the  Commission  by  a  professor  of  law  of  the  University  of  Illinois, 
is  in  support  even  of  unsound  pension  systems,  on  the  score  that 
pension  systems  promote  efficiency  in  the  public  service. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  25 


CHAPTER  III 


EXPOSITION   OF  THE   MAIN    PROVISIONS   OF   THE 
STANDARD  PLAN  FOR  A  COMBINED,  COMPRE- 
HENSIVE AND  PERMANENT  ANNUITY  AND 
INSURANCE  SYSTEM   FOR  PUBLIC 
EMPLOYES 


The  purpose  of  this  chapter  is  to  set  forth  in  concrete  form  the 
main  provisions  of  the  Standard  Annuity  and  Insurance  Plan  which 
the  Commission  recommends.  This  plan  has  been  designed  to  carry 
out  the  principles  that  underlie  a  sound  pension  plan.  The  factors 
involved  are  such  that  the  plan  is  necessarily  complex.  No  attempt 
is  made  in  this  chapter  to  give  all  the  details  involved  in  a  complete 
technical  description  such  as  would  be  given  in  an  act  of  legislation. 
The  effort  is  rather  to  make  clear  the  meaning  of  the  main  provisions 
by  an  outline  of  the  plan  followed  with  explanatory  comments. 

Employes  to  Whom  the  Plan  Is  Applicable 

The  plan  when  authorized  by  the  State  is  immediately  applicable 
to  all  public  employes  now  included  in  pension  systems.  After  adop- 
tion it  would  also  be  available  to  be  applied  by  any  legislature  to  all 
other  employes  whose  permanency  of  tenure  makes  it  desirable  that 
they  be  included  in  a  pension  system. 
Main  Objectives  of  the  Standard  Plan 

The  main  objectives  of  the  Standard  Plan  are  to  apply  sound 
principles  in  meeting  the  following  classes  of  hazards : 

1.  Old  Age  Inefficiency. 

2.  Death. 

3.  Sickness  and  Accident. 

These    hazards    are    met    by    providing    old-age    retirement    an- 
nuities, life  insurance  with  annuities  for  widows  as  a  special  feature, 
children's  annuities,  and  sickness  and  accident  benefits. 
Definitions 

It  is  desirable  to  give  definitions  of  some  of  the  technical  terms 
used  in  describing  the  proposed  Standard  Plan.  These  definitions  are 
as  follows: 

The  "standard  age. of  retirement"  in  the  public  service  is  55 
years  for  policemen  and  firemen  and  60  years  for  all  other  employes 


26  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

The  "minimum  age  of  retirement"  is  an  age  five  years  lower 
than  the  "standard  age  of  retirement." 

An  "annuity"  is  a  yearly  payment,  in  monthly  instalments,  the 
duration  of  which  is  contingent  upon  some  future  event.  In  general, 
an  "annuity"  means  a  "life  annuity,"  that  is,  one  whose  duration  ex- 
tends to  the  death  of  the  annuitant.  There  are,  however,  exceptions. 
Thus,  "children's  annuities"  terminate  at  a  certain  age.  "Disabled 
employes'  annuities"  terminate  upon  recovery.  "Widows'  annuities" 
under  certain  circumstances  terminate  before  death.  The  conditions 
under  which  annuities  terminate  before  death  will  be  made  clear  as 
this  chapter  is  developed.  As  we  use  the  expression,  unless  other- 
wise stated,  an  annuity  of  a  certain  sum  means  a  payment  of  that 
sum  per  year  in  equal  monthly  instalments,  the  first  payment  being 
made -at  the  end  of  the  first  month  of  the  term  covered. 

A  "future  entrant"  is  an  employe  who  enters  the  service  after 
the  proposed  plan  has  taken  effect. 

A  "present  employe"  is  an  employe  who  is  in  the  service  at  the 
time  the  proposed  plan'  goes  into  effect. 

"Final  salary"  is  the  salary  of  the  employe  for  the  year  preced- 
ing the  date  when  he  attains  the  standard  age  of  retirement  or  the 
date  when  he  retires  if  he  retires  before  reaching  the  standard  age 
of  retirement. 

A  Plan  for  Future  Entrants  the  First  Step 

We  shall  perhaps  follow  most  naturally  the  development  of  the 
proposed  plan  by  setting  forth  the  provisions  for  future  entrants; 
for,  in  this  case  the  issues  are  not  clouded  with  the  existence  of  prior 
service  given  under  no  pension  system  or  under  an  unsound  pension 
system  that  has  held  out  promises  with  little  or  no  regard  to  the 
method  by  which  funds  are  to  be  provided  with  which  to  pay  pen- 
sions. If  we  first  present  a  plan  for  future  entrants  we  shall  then 
be  in  a  position  to  point  out  the  modifications  necessary  to  bring 
present  employes  under  the  system. 

OUTLINE  OF  THE  STANDARD  PLAN  FOR  FUTURE  EN- 
TRANTS 

The  main  features  involved  in  the  Standard  Plan  proposed  by  thfe 
Commission,  providing  for  (I)  old-age  retirement  annuities,  (II)  life 
insurance,  and  (III)  sickness  and  accident  insurance,  are  indicated  in 
the  following  outline : 

I.     Old  Age  Retirement  Annuities 

1.  AMOUNT  OF  ANNUITY — (a)  When  an  employe  retires  after 
reaching  the  standard  age  of  retirement,  there  is  available  an  annuity 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  27 

of  50  per  cent  of  final  salary  in  case  the  employe  is  a  policeman  or  a 
fireman,  and  40  per  cent  of  final  salary  in  case  he  belongs  to  any  other 
branch  of  service,  subject,  however,  to  the  condition  that  the  em- 
ploye was  long  enough  in  service  and  was  receiving  final  salary  long 
enough  to  permit  the  accumulation  of  sufficient  funds  to  provide  the 
annuity  under  the  limitations  on  contributions  and  according  to  the 
plan  of  accumulations  stated  below.  If,  however,  an  employe  is  not 
long  enough  in  service  or  does  not  receive  the  amount  of  his  final 
salary  long  enough  to  accumulate  the  funds  necessary  to  provide  the 
full  annuity,  he  receives  an  annuity  of  the  amount  which  the  ac- 
cumulations to  his  credit  when  he  reaches  the  standard  age  of  retire- 
ment will  provide  at  that  age. 

(b)  When  an  employe  retires  at  or  after  attaining  the  minimum 
age  of  retirement*  but  before  attaining  the  standard  age  of  retirement 
there  is  available  an  annuity  of  such  amount  as  the  accumulations  to 
his  credit  will  provide. 

(c)  When  an  employe  withdraws  after  more  than  ten  years  of 
service,  there  is  available  an  annuity  at  or  after  the  minimum  age  of 
retirement  of  such  amount  as  can  be  provided  by  the  accumulations 
from  his  deductions  from  salary  described  in  Section  2  below,  and 
one-tenth  of  the  accumulations  from  contributions  of  the  employer  for 
each  year  of  such  employe's  service  in  excess  of  ten  until  the  total 
accumulations  of  the  employer's  contributions  are  available  for  such 
annuity.     After  the  withdrawal  of  the  employe,  the  interest  rate  on 
the  accumulation  is  3^2  per  cent  instead  of  the  regular  rate  which 
is  4  per  cent,  and  the  annuity  provided  is  on  a  3*/2  per  cent  interest 
basis. 

2.  CONTRIBUTIONS  BY  EMPLOYER  AND  EMPLOYE— (a)  CONTRI- 
BUTIONS SPREAD  OVER  A  LONG  PERIOD  OF  TIME — To  provide  the  old- 
age  retirement  annuity,  the  employer  and  employe  contribute  to- 
gether percentages  of  salary  varying  with  the  employe's  age  of  en- 
trance into  service  and  with  the  age  at  which  increases  in  salary  are 
obtained. 

The  amount  to  be  contributed  during  each  service  year  shall 
be  such  that  the  total  sum  necessary  to  provide  the  annuity  will  be 
accumulated  within  the  first  twenty-five  years  of  service,  provided 
that  at  no  time  the  per  cent  of  salary  contributed  shall  exceed  the 
per  cent  of  salary  specified  below  as  a  maximum  contribution. 

When  the  accumulations  at  the  end  of  the  twenty-five  year  period 
are  insufficient  to  provide  the  normal  retirement  annuity,  and  the  em- 
ploye continues  in  service,  contributions  of  the  maximum  limiting 
percentage  of  salary  are  continued  until  the  necessary  amount  to 


28  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

provide  the  normal  annuity  is  accumulated,  but  all  contributions  by 
and  for  future  entrants  cease  at  the  standard  age  of  retirement. 

In  the  normal  case,  the  period  of  time  during  which  contributions 
are  made  will  be  from  the  time  of  entrance  into  service  to  the  standard 
age  of  retirement. 

The  percentage  of  salary  contributed  is  that  computed  to  be 
necessary  to  accumulate  to  the  standard  age  of  retirement  an  amount 
equal  to  the  actuarial  equivalent  of  the  annuity  prescribed  above. 

(b)  RATIO  OF  AMOUNT  CONTRIBUTED  BY  EMPLOYER  AND  EM- 
PLOYE— The  employer   and   the   employe   contribute   in   the   ratio   of 
three  to  one  to  provide  the  old-age  retirement  annuity  in  case  the 
employe  be  a  policeman  or  a  fireman,  and  in  the  ratio  of  two  to  one 
if  he  belongs  to  any  other  branch  of  the  public  service. 

(c)  PLAN   OF    ACCUMULATION — Amounts    contributed    are    held 
to  the  credit  of  the  individual  employe  by  and  on  behalf  of  whom  the 
contributions  are  being  made,  and  are  accumulated  at  4  per  cent  in- 
terest compounded  annually. 

(d)  MAXIMUM   LIMITATION   ON   PERCENTAGE  OF   SALARY  CON- 
TRIBUTED FOR  OLD-AGE  RETIREMENT  ANNUITY — The  limit  on  the  con- 
tributions by  any  employe   for  old-age   retirement  annuity  is  4  per 
cent  of  salary  and  the  limit  on  the  employer  is  fixed  by  this  limitation 
on  the  employe  and  by  the  ratios  specified  in  paragraph   (b)   above, 
at  12  per  cent  in  the  case  of  policemen  and  firemen,  and  8  per  cent 
in  the  case  of  other  employes. 

(e)  MAXIMUM  SALARY  USED  AS  A  BASIS  OF  ANNUITIES  AND  IN- 
SURANCE— Any  salary  of  $2,500  or  more  is  counted  as  $2,500  in  the 
determination  of  the  amounts  of  annuities  and  insurance  and  of  con- 
tributions. 

3.  REFUND  OF  CONTRIBUTIONS  WITH  INTEREST —  (a)  In  case  an 
employe  withdraws  from  service  before  he  attains  the  minimum  age 
of  retirement,  his  equities  are  protected  by  a  right  to  receive  a  re- 
fund of  his  deductions  from  salary  with  4  per  cent  compound  interest. 
If,  however,  he  accepts  such  refund,  he  forfeits  all  annuity  rights. 

(b)  In  case  an  annuitant  and  his  dependents  who  receive  bene- 
fits through  him  do  not  together  receive  at  least  as  much  in  benefits 
as  the  amount  of  accumulations  at  the   standard  age  of   retirement 
from  deductions  from  salary,  there  is  refunded  to  the  heirs  of  such 
annuitant  the  balance  of  such  accumulations. 

(c)  In  case  an  employe  withdraws  from  service  or  attains  the 
standard  age  of  retirement  before  giving  ten  years  of  service,  he  is 


ILLINOIS   I'KNSION  LAWS  COMMISSION,  1918-1919  29 

• 

simply  entitled  to  a  refund  of  contributions  made  by  deductions  from 
his  salary  with  4  per  cent  interest  compounded  annually. 

II.     Life  Insurance 

1.  LIMITED    PAYMENT    INSURANCE — The    insurance    is  .provided 
under  a  limited  payment  plan,  according  to  which  it  is  paid  up  at 
the  standard  age  of  retirement. 

2.  AMOUNT  OF  INSURANCE — The  amount  of  insurance  is  one  and 
three-fourths  of  the  yearly  salary  in  case  the  employe  is  a  policeman 
or  a  fireman,  and  one  and  one-fourth  the  yearly  salary  in  case  the 
employe  belongs  to  any  other  branch  of  the  public  service. 

3.  PREMIUMS  FOR  LIFE  INSURANCE — The  premiums  for  the  life 
insurance  are  the   level  net   premiums   based  on   the   American   Ex- 
perience Table  of  Mortality  and  3*/2  per  cent  interest. 

4.  METHOD  OF  PAYMENT  OF  PREMIUMS — The  employer  and  the 
employe  are  to  contribute  equal  amounts  toward  the  life  insurance 
premiums  during  each  year  of  service  of  the  employe. 

5.  CONVERSION  OF  INSURANCE  INTO  A  SURVIVORSHIP  ANNUITY 
FOR  WIFE — At  the  standard  age  of  retirement  the  cash  value  of  the 
insurance  of  the  married  male  employe  is  converted  into  a  survivor- 
ship annuity  for  his  wife. 

The  amount  of  the  annuity  thus  provided  for  a  widow  in  the 
normal  case  will  be  25  per  cent  of  the  salary  of  the  deceased  husband 
if  he  were  a  policeman  or  a  fireman,  and  20  per  cent  if  he  were  other- 
wise employed. 

6.  RIGHT  OF-  A  WITHDRAWING  EMPLOYE  TO  CONTINUE  HIS  IN- 
SURANCE— The   withdrawing   employe  has   the   right   to   continue  his 
insurance  by  assuming  thereafter  all  the  premium  payments  includ- 
ing those  which,  had  he  remained  in  the  service,  would  have  been 
payable  from  the  employer,  and   10  per  cent  added  to  the  total  for 
expenses.  > 

7.  LIFE  INSURANCE  OPTIONAL  FOR  WOMEN,  AND  FOR  OTHER  EM- 
PLOYES NOT  PAID  ON  AN  ANNUAL  BASIS— It  is  left  optional  for  women 
in  the  service,  and  for  employes  not  paid  on  an  annual  basis  to  take  the 
insurance  in  the  system. 

8.  MAXIMUM  LIMITATION  ON  PER  CENT  OF  SALARY  CONTRIBUTED 
FOR  LIFE  INSURANCE — The  limit  on  the  contributions  by  any  employe 
for  the  life  insurance  provided  under  this  plan  is  2  per  cent  of  salary, 
and  the  contributions  of  the  employer  are  similarly  limited  to  2  per 
cent  of   salary,  by  the  general  provision  that   contributions   for   life 
insurance  by  employer  and  employe  are  to  be  equal. 


30  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

III.  Sickness  and  Accident  Insurance 

1.  When  the  Sickness  or  Accident  Are  Not  the  Direct  Result  of 

the  Performance  of  Duty 

(a)  AMOUNT  OF  BENIFIT — Monthly  payments  equal  to  30  per 
cent  of  the  monthly  salary  of  the  employe  during  disability  except  in 
the  event  that  the  employe  attains  the  standard  age  of  retirement  be- 
fore  recovery.     These   payments   are  subject  to   such   deductions   as 
are  necessary  to  keep  up  the  contributions  required  of  the  employe  for 
the  old-age  retirement  annuity  and  for  his  life  insurance  involved  in 
the  plan. 

(b)  DISTRIBUTION  OF  CONTRIBUTIONS — To  provide  the  sickness 
and  accident  benefits,  the  employer  and  the  employe  contribute  equal 
amounts   during  each   service  year.     The  contributions   of   employes 
during  each  year  are  pro  rated  to  the  employes  according  to  their 
respective  salaries. 

See  comments  below  giving  reasons  for  this  distribution  of  con- 
tributions of  employes. 

2.  When  Disability  Is  the  Direct  Result  of  the  Performance  of 

Duty 

In  this  case  the  monthly  payment  to  the  employe  is  equal  to  75 
per  cent  of  the  monthly  salary  and  such  payment  is  to  be  continued 
during  disability  except  in  the  event  that  the  employe  attains  an  age 
five  years  beyond  the  standard  age  of  retirement  before  recovery. 
Also,  during  the  employe's  disability,  annuities  are  paid  to  his  children 
under  18  years  of  age. 

The  employer  provides  the  funds  to  pay  these  benefits  and  to 
keep  up  the  disabled  employe's  contributions  towards  the  old-age 
retirement  annuity. 

When  the  employe  attains  an  age  five  years  beyond  the  standard 
age  of  retirement,  the  disability  benefit  is  discontinued  and  he  receives 
thereafter  the  old-age  retirement  annuity  provided  for  him. 

IV.  Benefits  for  Children  of  Employes  Who  Die  While  in  Ser- 

vice or  When  Retired  on  Annuity  and  for  Children  of  Those 

Disabled  in  the  Performance  of  Duty 

For  each  child  of  the  blood  of  the  employe  in  question  there  is 
paid  up  to  age  18,  if  the  mother  survives,  ten  dollars  per  month, 
but  this  amount  is  reduced  to  five  dollars  per  month  between  the  ages 
of  14  and  18  when  the  child  is  not  attending  school.  In  each  case  if 
the  mother  is  not  living  the  child  receives  five  dollars  more  per  month 
than  would  be  the  case  if  the  mother  were  living.  This  provision  for 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  31 

children  is  subject  to  the  limitation  on  the  total  annuity  that  can  be 
received  by  the  widow  and  children  of  an  employe.  If  death  did  not 
occur  as  the  direct  result  of  the  performance  of  duty,  the  limitation 
is  50  per  cent  of  the  salary  of  the  employe  in  the  case  of  a  policeman 
or  a  fireman,  and  40  per  cent  in  case  of  an  employe  belonging  to  any 
other  branch  of  the  service.  If  the  death  of  the  employe  occurred 
as  the  direct  result  of  the  performance  of  duty,  the  limitation  is  75 
per  cent  of  salary. 

In  the  event  that  the  employe  is  disabled  in  the  performance  of 
duty,  the  compensation  to  the  employe  and  the  children  does  not  ex- 
ceed the  salary  of  the  employe,  less  the  amounts  that  would  be  paid  by 
the  employer  during  disability  as  contributions  toward  the  old-age 
retirement  annuity  and  the  life  insurance  of  the  employe. 

V.     Method  of  Administration 

1.  RETIREMENT  BOARD — Each  fund  is  administered  by  a  Retire- 
ment Board  consisting  of  five  members,  three  of  whom  are  employes 
or  annuitants  of  the  fund  and  are  elected  by  the  employe  contributors 
to  and  annuitants  of  the  fund.     The  other  two  members  are  appointed 
by  the  employing  authorities. 

2.  STATE  BOARD  OF  TRUSTEES — The  plan  provides  for  a  Board  of 
Trustees  of  three  members  to  be  appointed  by  the  Governor  with  the 
approval  of  the  Senate.     The  chief  duties  of  this  Board  of  Trustees 
are  to  supervise  the  operation  of  all  the   funds  including  actuarial 
supervision,   to   administer   the   operation   of   equalization   funds   that 
are  designed  to  tie  together  all  the  funds  into  one  system  so  as  to  add 
to  their  stability,  to  furnish  expert  advice  to  Retirement  Boards  re- 
garding the  investment  of  funds  and  to  report  to  future  General  As- 
semblies in  regard  to  pension  legislation  in  this  State. 

MODIFICATIONS  OF  THE  PLAN  OUTLINED  FOR  FU- 
TURE ENTRANTS  T6  MAKE  IT  APPLICABLE  TO 
PRESENT  EMPLOYES 

I.     Old  Age  Retirement  Annuities  for  Present  Employes 

1.  The  Part  of  the  Annuity  to  Be  Provided  Solely  by  the  Contri- 
butions from  the  Employer: 

(a)  The  total  payments  of  the  employer  toward  old-age  retire- 
ment annuity  of  a  policeman  or  a  fireman  shall  be  such  as  will  provide 
the  retirement  annuity  of  three-fourths  of  the  total  annuity  which 
he  would  have  received  if  he  had  given  his  entire  service  under  the 
proposed  plan. 


32  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

(b)  The  total  payments  of  the  employer  toward  the  retirement 
annuity  of  the  employe  other  than  policemen  and   firemen  shall  be 
such  as  would  provide  two-thirds  of  the  total  retirement  annuity  to 
which   such   employe   would  be   entitled   if   he   had  given  his   entire 
service  under  the  proposed  plan. 

(c)  The  employer  meets  these  payments  in  part  by  contributing 
in  the  future  on  behalf  of  the  present  employe  during  the  remainder 
of  his  service  as  if  such  employe  had  given  his  entire  service  under 
the  proposed  plan,  and  the  employer  assumes  responsibility  for  the 
payment  of  the  remainder  as  part  of  the  accrued  liability  of  this  sys- 
tem which  is  to  be  liquidated  under  a  provision  for  instalments  over  a 
long  term. 

See  comments  below  for  explanation  of  the  meanings  of  the  ac- 
crued liabilities  and  the  long  term  instalment  provision. 

2.  The  Part  of  the  Annuity  to  Be  Provided  Solely  by  Contribu- 

tions of  the  Employe  Through  Deductions  from  Salary 

(a)  Each   employe   is   credited   with   all   contributions   which   he 
made  to  a  pension   system  superseded  by  the   present  system,   with 
4  per  cent  interest  compounded  annually. 

(b)  The  remainder  of  a  normal  old-age  retirement  annuity  not 
provided   for  by  the  employer's   contributions  nor  by  the   funds  ac- 
cumulated from  contributions  to  a  superseded  pension  system  is  made 
up  by  the  deduction  from  the  salary  of  the  employe  but  subject  to 
the  limitation  of  four  per  cent  of  the  salary  of  the  employe  as  the 
maximum  deduction  in  salary  to  provide  old-age  retirement  annuity. 

(c)  If  on  account  of  the  four  per  cent  limitation  in  contributions 
or  if  for  any  other  reason  the  old-age  retirement  annuity  of  the  present 
employe  is  less  than  it  would  have  been  if  he  had  given  his  entire 
service  under  the  proposed  plan,  such  employe  continues  the  contri- 
bution of  four  per  cent  of  salary  if  he  remains  in  the  service  after 
the  standard  age  of  retirement  in  order  to  increase  his  annuity  towards 
the  normal  amount. 

3.  A  Present  Employe  to  Receive  Benefits  at  Least  Equal  to  Those 

Specified  in  a  Superseded  Act  to  Which  He  Was  a  Contrib- 
utor 

When  an  employe  has  been  a  contributor  to  a  pension  system 
superseded  by  the  Standard  Plan,  he  comes  under  the  Standard  Plan 
and  makes  contributions  required  under  this  plan,  but  such  employe 
is  entitled  to  receive,  at  the  minimum  age  of  retirement,  a  pension  as 
large  as  that  specified  in  the  superseded  act  to  which  he  was  a  con- . 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  33 

tributor,  provided  that  in  computing  the  amount  of  such  benefits,  the 
salary  used  is  that  of  the  date  when  the  Standard  Plan  went  into 
effect. 

II.     Life  Insurance  for  Present  Employes 

1.  The  Part  of  Life  Insurance  to  Be  Provided  Solely  by  the  Con- 

tributions from  the  Employer 

(a)  The  contributions  of  the  employer  towards  the  life  insur- 
ance are  to  be  such  as  will  provide  one-half  of  the  life  insurance 
which  would  have  been  provided  if  the  employe  had  given  his  entire 
service  under  the  proposed  Standard  Plan. 

(b)  The  employer  meets  the  payment  of  these  contributions  in 
part  by  making  contributions  in  the  future  towards  life  insurance  of 
the  present  employe  just  as  if  the  employe  had  given  his  entire  service 
under  the  proposed  plan,  and  assumes  the  responsibility  for  the  pay- 
ment of  the  remainder  necessary  to  make  one-half  of  this  insurance 
paid  up  at  the  standard  age  of  retirement.     This  remainder  is  part 
of  the  accrued  liability  of  the  system  to  be  liquidated  on  a  long  term 
instalment  basis. 

2.  The  Part  of  the  Life  Insurance  to  Be  Provided  Solely  by  the 

Contributions    from    the    Employe    from    Deductions    from 
Salary 

The  employe  makes  contributions  through  deductions  from  salary 
to  carry  one-half  of  the  life  insurance  provided  under  the  system,  but 
if,  on  account  of  the  two  per  cent  limitation  in  contributions  toward 
life  insurance,  the  full  premium  cannot  be  paid,  then  the  amount  of 
his  life  insurance  is  proportionately  reduced. 

EXPLANATORY  COMMENTS   ON   THE   PROVISIONS   OF 

THE  STANDARD  PLAN 

\ 

Reserve  Basis  for  Old-Age  Retirement  Annuities  and  Life  Insur- 
ance— Cash  Disbursement  Basis  for  Other  Benefits 

For  old-age  retirement  annuities  and  life  insurance,  the  plan 
recommended  by  the  Commission  is  a  reserve  system.  In  such  a 
system  the  funds  to  provide  the  promised  benefits  are  being  accumu- 
lated as  service  is  being  rendered,  so  that  when  an  employe  retires 
on  an  annuity  or  dies,  the  funds  have  been  accumulated,  out  of  which 
to  pay  the  promised  benefits.  Under  such  a  system,  the  burden  is 
placed  on  the  generation  for  whom  the  service  is  rendered  and  not 
on  a  later  generation. 


34  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

For  other  benefits  involved  in  the  plan,  namely,  children's  an- 
nuities, sickness  and  accident  insurance,  and  annuities  because  of  dis- 
ability or  death  while  in  the  performance  of  duty,  the  Commission 
does  not  recommend  that  the  reserve  system  be  adopted  at  the  present 
time,  but  recommends  that  these  benefits  be  provided  by  current  con- 
tributions, for  the  following  reasons : 

1.  Those    benefits    are,    from    their    nature,    largely    temporary. 
Even  in  a  case  where  an  employe  is  permanently  disabled,  the  burden 
of  disability  benefits  under  the  system  which  we  propose  ceases  when 
the  employe  attains  an  age  five  years  beyond  the  standard  age  of  re- 
tirement. 

2.  At  the  present  time,  no  suitable  statistics   are  obtainable  on 
which  to  base  premium  rates  for  the  sickness  and  accident  insurance, 
or  for  the  children's  annuities.     The  Commission  is  able  to   say  at 
the  present  time  that  in  the  case  of  children's  annuities  and  in  the 
case  of  annuities  on  account  of  death  or  injury  in  the  performance 
of  duty,  the  experience  of  the  past  has  been  that  the  costs  of  these 
benefits  are  small  compared  to  those  involved  in  old-age  retirement 
annuities. 

3.  The  amount  that  will  be  required  to  pay  sickness  and  accident 
benefits  will  depend  so  largely  upon  the  alertness  of  employes  them- 
selves against  abuse  of  the  fund  that  it  is  highly  desirable  to  have 
a  yearly  distribution  of  these  costs.     This  procedure  should  have  the 
effect   of    creating   an   important   check   on   malingering.     After   the 
funds  have  gathered  an  experience  of  their  own  on  which  it  appears 
safe  to  base  premium  rates,  it  may  be  desirable  to  place  other  factors 
than  those  of  the  old  age  annuities  and  life  insurance  on  the  reserve 
basis. 

Annuities  as  Percentage  of  Salary  Rather  Than  a  Flat  Amount 

An  annuity  consisting  of  a  percentage  of  salary,  as  provided  in 
the  Standard  Plan,  more  nearly  conforms  to  the  standard  of  living 
that  an  employe  has  set  for  himself  than  an  annuity  of  an  amount 
uniform  for  all  employes — the  so-called  flat  pension. 

Such  a  flat  annuity  must  necessarily  be  an  amount  which  would 
appeal  to  the  employe  of  average  salary.  In  that  event,  however, 
it  would  not,  in  a  service  involving  a  wide  range  of  salaries,  be  of 
sufficient  size  to  encourage  the  high-salaried  employe  to  leave  the 
service  soon  enough.  On  the  other  hand  it  would  be  so  large  that 
it  would  encourage  the  low-salaried  employe  to  leave  too  soon. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  35 

Basis  for  Recommending  Annuities  of  50  Per  Cent  of  Salary  for 
Policemen  and  Firemen  and  40  Per  Cent  of  Salary  for  Other 
Employes 

It  is  a  feature  of  the  proposed  plan  that  needs  some  explanation 
that  the  annuities  for  policemen  and  firemen  are  fixed  in  normal  cases 
at  50  per  cent  of  salary,  and  for  other  employes  at  40  per  cent. 

The  financial  burden  involved  in  the  present  pension  systems  is 
such  that  the  Commission  has  not  felt  that  the  pensions  of  employes 
should  be  fixed  at  more  than  40  per  cent  of  salaries,  but  as  firemen  and 
policemen  have  an  expectation  of  50  per  cent  of  final  salary  as  pen- 
sions under  existing  laws,  except  in  the  cases  of  higher  officers,  the 
Commission  does  not  deem  it  wise  to  recommend  less  than  50  per 
cent  for  them. 

In  the  other  branches  of  the  service,  the  existing  pension  plans 
provide  for  pensions  of  uniform  amount  per  year.  For  the  lower- 
salaried  employes  of  certain  groups  the  ratio  of  pension  to  salary 
of  such  employes  with  the  flat  pension  seemed  to  be  too  great  for  the 
good  of  the  service.  The  Commission  was  of  the  opinion  that  40  per 
cent  of  salary  in  such  cases  would  tend  to  greater  benefit  to  the 
service  than  the  present  flat  pension.  For  the  higher-salaried  em- 
ployes, 40  per  cent  gives  a  pension  equal  to  or  greater  than  that  pro- 
vided under  existing  laws. 

The  Amount  of  Annuity  Is  Determined  at  the  Standard  Age  of 
Retirement 

It  is  a  feature  of  the  Standard  Plan  that  the  amount  of  annuity 
payable  per  year  is  not  increased  on  account  of  the  fact  that  an  em- 
ploye remains  in  service  beyond  the  standard  age  of  retirement,  but 
an  exception  is  made  that  applies  only  to  present  employes. 

As  to  the  present  employes,  although  the  amount  of  annuity  is 
determined  at  the  standard  age* of  retirement,  the  employe  is  given 
the  special  privilege  of  increasing  his  annuity  by  continuing  his  con- 
tributions while  he  remains  in  service,  provided  the  annuity  at  the 
standard  age  of  retirement  is  found  to  be  less  than  it  would  have  been 
if  he  had  given  his  full  term  of  service  under  the  provisions  of  the 
Standard  Plan. 

In  some  financially  sound  pension  systems  the  accumulated  funds 
on  behalf  of  an  individual  employe  are  allowed  to  accumulate  after 
a  prescribed  age  of  retirement  so  as  to  increase  the  annuity.  -Further- 
more, on  account  of  the  greater  age  of  the  employe  when  he  accepts 
the  annuity,  the  annuity  payments  per  year  are  increased. 


36  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

It  was  the  sense  of  the  Commission  that  it  was  undesirable  thus 
to  offer  inducements  to  remain  in  service  beyond  the  standard  age 
of  retirement.  Furthermore,  the  widows'  annuity  scheme  in  this  plan 
makes  it  desirable  that  the  annuity  rights  be  fixed  at  the  standard 
age  of  retirement. 

Standard  Ages  of  Retirement  Based  on  Experience 

The  Commission  has  examined  the  retirement  ages  of  pension 
systems  throughout  this  country  and  foreign  countries  in  its  efforts 
to  arrive  at  a  conclusion  in  regard  to  proper  retirement  ages.  The 
usual  ages  of  retirement  are  higher  than  those  given  in  present  Illinois 
pension  laws. 

The  Commission  has  recognized  that  policemen  and  firemen 
should  retire  from  service,  on  the  average,  five  years  before  employes 
in  other  branches  of  the  service  in  recommending  that  the  standard 
age  of  retirement  be  55  in  the  one  case  and  60  in  the  other.  The 
Standard  Plan  seems  to  be  unique  in  that  it  establishes  an  interval 
of  time — the  five  years  from  50  to  55  for  firemen. and  policemen,  and 
from  55  to  60  for  other  employes — during  which  an  employe  may  re- 
tire and  receive  an  old  age  retirement  annuity  of  such  an  amount  as 
the  accumulations  then  to  his  credit  for  that  purpose  will  provide. 

Ratios  of  Contributions  by  Employer  and  Employe  in  the  Stand- 
ard Plan  Are  Put  on  Practical  Basis 

It  is  an  important  feature  of  the  plan  that  the  employer  and 
employe  contribute  for  the  old-age  retirement  annuity  in  the  ratio 
of  three  to  one  in  the  case  of  policemen  and  firemen  and  in  the  ratio 
of  two  to  one  in  the  case  of  other  employes.  It  would  be  difficult 
to  present  a  satisfactory  argument  for  these  ratios  as  ideal  ratios. 
It  is  maintained  by  some  that  "equal  distribution  of  contributions  would 
constitute  a  better  basis  for  cooperation  than  the  ratios  contained  in 
this  plan.  Indeed  the  three  or  four  instances  of  recent  legislation  for 
sound  contributory  pension  systems  provide  that  the  contributions  shall 
be  equally  divided  between  the  employer  and  the  employe.  The  ratios 
given  in  the  Standard  Plan  are  recommended  chiefly  by  practical 
considerations  as  to  the  amounts  of  deductions  that  can  at  this  time 
reasonably  be  made  from  salaries  and  wages  of  employes. 

Two  sets  of  ratios  are  put  forward  also  because  of  the  difference 
in  amounts  required  to  provide  the  annuities.  For  an  annuity  of  50 
per  cent  .of  salary  available  at  age  55  as  provided  for  policemen  or 
firemen  it  is  clear  that  a  much  larger  percentage  of  salary  must  be 
contributed  by  employer  and  employe  together  than  for  an  annuity 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  37 

of  40  per  cent  of  salary  available  at  age  60  as  provided  for  other 
employes.  The  ratios  of  three  to  one  for  policemen  and  firemen  and 
two  to  one  for  other  employes  equalize  to  some  extent  the  percentages 
of  salary  deducted  in  the  two  cases. 

Life  Insurance  When  Payable  to  Widows  or  Children  Would  Be 
in  Instalments  for  Life  or  for  a  Term  of  Years 

It  is  an  element  of  this  plan  that  is  worth  mentioning  that  life 
insurance  is  payable  to  widows  as  a  life  annuity,  unless  the  prin- 
cipal sum  is  such  that  it  would  provide  an  annuity  of  less  than  $15.00 
per  month.  In  such  cases,  payments  of  $15.00  per  month  are  made 
as  long  as  the  accumulated  fund  will  provide  them. 

Mortality  Tables  and  Interest  Rates  Recommended  by  the  Com- 
mission 

Actuaries  of  the  Commission  are  of  the  opinion  that  the  statistics 
gathered  by  this  Commission  and  the  Illinois  Pension  Laws  Com- 
mission of  1916  are  not  suitable  data  on  which  to  depend  with  regard 
to  retirements  on  annuities  after  the  introduction  of  a  scientifically 
constructed  annuity  system.  It  seems  better,  for  the  present,  to  use 
a  well-known  table  of  mortality  than  to  use  one  constructed  from 
any  of  the  Illinois  Pension  Funds.  For  the  largest  of  the  funds 
namely,  the  State  Teachers'  Annuity  and  Retirement  Fund,  statistics 
of  any  sort  are  almost  entirely  lacking.  The  Commission  recom- 
mends that  when  adequate  statistics  relating  to  the  larger  Illinois 
Funds  are  available,  the  question  of  constructing  tables  of  mortality 
to  be  used  in  connection  with  the  Illinois  Annuity  System  be  con- 
sidered. 

The  actuaries  of  the  Commission  recommend  that  the  American 
Experience  Table  of  Mortality  with  4  per  cent  interest  be  used  as  a 
basis  for  accumulations  of  funds  for  old-age  retirement  annuities  and 
widows'  annuities  until  such  time  as  this  system  has  an  experience 
adequate  to  furnish  statistics  of  its  own  that  are  suitable  for  suggest- 
ing a  table.  The  actuaries  of  the  Commission  feel  certain  that  if  all 
should  accept  an  annuity  as  soon  as  eligible,  the  American  Experience 
Table  of  Mortality  with  4  per  cent  interest  would  not  furnish  adequate 
reserves  for  the  annuities.  The  experience  of  the  funds,  however, 
shows  that  a  great  many  employes  will  remain  on  salary  after  they 
become  eligible  for  annuity,  and  for  each  one  who  does  so,  a  surplus 
is  contributed  to  the  fund.  It  is  believed,  on  this  account,  that  the 
above  mortality  table  and  rate  of  interest  for  the  accumulation  of  funds 
at  the  standard  age  of  retirement  will  be  found  adequate,  and  may 


38  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

lead  to  the  accumulation  of  a  surplus.  In  order  that  a  surplus  may  not 
accumulate  beyond  what  might  reasonably  be  necessary,  the  actuaries 
feel  that  another  well-known  table  showing  a  lower  rate  of  mortality 
should  be  used  to  test  its  sufficiency.  They,  therefore,  recommend  that 
when  surplus  exists  on  the  basis  of  McClintock's  Table  for  Annuitants, 
male  or  female,  with  3  per  cent  interest,  such  surplus  may  safely  be 
distributed. 

The  Commission  is  of  the  opinion  that  it  may  be  assumed  with 
safety  at  the  present  time  that  investments  can  earn  4  per  cent  in- 
terest. It,  therefore,  recommends  that  4  per  cent  be  used  as  the  basis 
of  interest  accumulation  on  contributions  for  old-age  retirement  an- 
nuities and  as  the  basis  on  which  all  annuity  reserves  be  computed. 
The  Commission  recommends  that  in  computing  premiums  and  re- 
serves for  life  insurance,  however,  the  rate  of  interest  be  3^>  per 
cent.  This  rate  is  adopted  for  such  calculations  instead  of  a  rate  of 
4  per  cent  because  it  is  believed  that  a  large  number  of  employes  will 
withdraw  from  service  before  becoming  eligible  for  retirement  annu- 
ities and  after  withdrawal  will  retain  their  insurance  and  continue 
paying  premiums.  Allowing  3^2  per  cent  on  these  premiums  thus 
paid,  which  may  be  expected  to  earn  4  per  cent,  gives  the  fund  a  mar- 
gin of  safety. 

Amounts  of  Life  Insurance  Prescribed  Are  Those  Necessary  to 
Provide  Survivorship  Annuities  for  Wives 

The  amounts  of  insurance  prescribed  may  very  naturally  appeal 
to  the  curiosity  of  those  interested  in  pension  systems.  The  amount 
of  insurance,  equal  to  one  and  one-quarter  years'  salary  of  employes 
in  some  cases  and  to  one  and  three-quarters  years'  salary  in  other 
cases  may  appear  rather  -artificial.  The  facts  are,  however,  that  these 
particular  amounts  were  decided  upon  after  very  careful  considera- 
tion of  the  amount  of  the  survivorship  annuity  that  can  be  provided 
at  the  standard  ages  of  retirement  for  a  wife  of  average  age. 

It  should  perhaps  be  recalled  that  upon  the  date  when  a  married 
employe  reaches  the  standard  age  of  retirement  the  cash  value  of  his 
paid-up  life  insurance  policy  is  convertible  into  a  survivorship  annuity 
for  his  wife.  It  is  the  amount  of  this  survivorship  annuity  that  was 
the  chief  factor  in  determining  the  amounts  of  life  insurance  deemed 
necessary  for  employes.  To  be  more  concrete,  it  was  the  desire  of  the 
Commission  to  provide,  in  the  average  case,  a  survivorship  annuity 
for  the  wife  equal  to  25  per  cent  of  salary  in  the  case  of  firemen  and 
policemen,  and  20  per  cent  in  the  case  of  other  employes.  The  par- 
ticular amounts  of  insurance  were  so  selected  as  to  carry  out  this  desire 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  39 

with  respect  to  the  amount  of  the  survivorship  annuity  in  the  typical 
case  with  regard  to  the  ages  of  husband  and  wife. 

The  Accrued  Liabilities  and  the  Long  Term  Instalment  Plan  of 
Liquidation 

The  provisions  for  future  entrants  would  apply  readily  to  the 
present  employes  who  have  been  in  the  service  only  a  short  time.  But 
for  the  older  present  employes,  especially  for  those  of  long  service, 
and  for  present  pensioners,  it  is  no  longer  possible  for  them  to  con- 
tribute to  provide  the  benefits  which  the  Commission  feels  should  be 
extended  to  them. 

The  difference  between  the  present  value  of  what  is  found  by 
actuarial  calculations  to  be  necessary  to  carry  out  the  promised  bene- 
fits and  the  present  value  of  all  assets  both  from  a  superseded  system 
and  from  the  accumulations  from  contributions  from  employer  and 
employe  to  be  made  in  the  future  under  the  plan  of  accumulations, 
is  called  an  accrued  liability. 

It  is  part  of  the  plan  to  specify  as  to  each  fund  that  such  liability 
will  be  liquidated  by  payment  by  the  employer  of  a  certain  amount 
per  year  during  a  period  of  perhaps  forty  years. 

The  Limitation  on  Percentage  of  Salary  Contributed 

Limitations  in  the  form  of  a  per  cent  of  salary  are  placed  on 

the  employe's  contributions.     These  limitations  are  put  at  4  per  cent 

towards  providing  a  retirement  annuity  and  2  per  cent  towards  life 

insurance. 

The  Commission  thinks  this  is  as  much  as  it  would  be  wise  or 

fair  to  require  as  a  deduction  from  current  salaries. 

Significance  of  Requiring  All  Contributions  Towards  Old-Age  Re- 
tirement Annuity   During   the   First   Twenty-five   Years   of 
Service  If  Limitation  on  Percentage  of  Salary  Will  Permit 
It  is  provided  in  the  Standard  Plan  that,  if  an  employe  enters  at 
an  age  so  low  that  he  can  give  more  than  twenty-five  years  of  service 
before  reaching  the  standard  age  of  retirement,  he  and  the  public  as 
employer  are  to  contribute  such  percentages  of  salary  as  are  calculated 
to  be  necessary  to  provide  the  retirement  annuity  on  the  basis  that  all 
contributions  cease  at  the  end  of  twenty-five  years  of  service.     This 
provision  would  be  unnecessary  if  the  salary  of  the  employe  should 
remain  the  same  throughout  the  entire  period  of  service,  but  no  one 
knows  in  advance  to  what  extent  the  salary  of  the  employe  may  in- 
crease in  the  latter  part  of  his  service. 


40  ILLINOIS  PENSION  LAWS  COMMISSION.  1918-1919 

The  purpose  of  this  provision  is  to  facilitate  the  accumulation  of 
funds  to  provide  an  annuity  equal  to  the  normal  percentage  of  salary 
for  the  employe  who  receives  advancement  in  salary  late  in  his  period 
of  service.  In  a  considerable  number  of  cases,  advancement  in  salary 
would  no  doubt  come  so  late  in  the  period  of  service  as  to  render 
impracticable  the  accumulation  of  the  proper  funds  to  provide  a  normal 
annuity  even  when  the  employe  gives  a  long  total  period  of  service. 
The  twenty-five  year  payment  provision  increases  somewhat  the  per- 
centage of  salary  to  be  contributed  during  the  first  twenty-five  years 
of  service,  but  tends  to  make  practicable  the  accumulation  of  the 
necessary  funds  to  provide  a  normal  annuity  by  continuing  contribu- 
tions of  the  maximum  percentage  of  salary  after  twenty-five  years 
of  service  if  insufficient  funds  are  accumulated  at  the  end  of  the 
twenty-five  year  period.  It  would  result  that  under  the  current 
conditions  of  advancement  in  salary  the  contributions  would  be 
continued  in  the  usual  case  beyond  the  twenty-five  year  period  in 
order  to  provide  the  annuity  aimed  at  in  the  plan  of  accumulations. 

Briefly  stated,  this  provision  may  be  looked  upon  as  one  that 
increases  the  chance  that  an  employe  will  get  the  normal  percentage 
of  salary  as  an  annuity. 

ON  THE  COST  OF  THE  ANNUITY  AND  LIFE  INSURANCE 
FEATURES  OF  THE  STANDARD  PLAN  EXPRESSED 
IN  PERCENTAGES  OF  SALARY 

The  Standard  Plan  provides  that  the  amount  contributed  as  a 
percent  of  salary  towards  the  old-age  retirement  annuity  of  an 
employe  varies  with  the  age  at  entrance  into  service  and  with  the 
ages  at  which  increases  in  salary  are  obtained.  The  amount  to  be 
contributed  during  each  service  year  is  such  that  the  total  sum  neces- 
sary to  provide  the  annuity  would  be  accumulated  from  the 
contributions  made  within  the  first  twenty-five  years  of  service,  pro- 
vided that  at  no  time  the  percentage  of  salary  contributed  by  the 
employe  would  exceed  the  4  per  cent  limitation  on  contributions.  It  is 
provided  that  the  amount  contributed  as  an  annual  premium  for  the 
life  insurance  varies  with  the  age  at  entrance  into  service  and  with 
the  ages  at  which  increases  in  salary  are  obtained,  but  the  period  of 
accumulation  for  life  insurance  is  from  the  age  of  entrance  into 
service  to  the  standard  age  of  retirement. 

If  an  attempt  were  made  to  apply  the  twenty-five  year  period 
plan  to  the  provisions  for  life  insurance,  there  would  be  certain  com- 
plications which  are  peculiar  to  the  life  insurance  computations.  These 
4o  not  arise  as  to  the  computations,  for  retirement  annuities.  This 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  41 

difference  is  the  principal  reason  for  not  applying  the  twenty-five 
year  period  plan  to  the  life  insurance  as  well  as  to  the  retirement 
annuities. 

Old-Age  Retirement  Annuities 

A  concrete  notion  of  the  percentages  of  salary  required  to  carry 
out,  for  employes  entering  the  service  at  various  ages,  the  provisions 
for  old-age  retirement  annuities,  may  be  obtained  rather  easily  by 
an  examination  of  the  figures  below  in  Table  I,  and  in  illustrations 
immediately  following  the  table. 

Table  I  shows,  in  terms  of  percentages  of  employe's  salary,  the 
combined  contributions  that  must  be  made  by  employer  and  employe 
beginning  at  the  age  stated  in  the  table,  so  that  the  amounts  set  aside 
will  accumulate  at  4  per  cent  interest  to  an  amount  sufficient  to  provide 
an  annuity  of  50  per  cent  of  salary  in  the  case  of  employes  for  whom 
the  standard  age  of  retirement  is  55,  and  40  per  cent  of  salary  in  the 
case  of  employes  for  whom  the  standard  age  of  retirement  is  60. 
The  figures  in  the  table  are  in  accord  with  the  provisions  of  the 
Standard  Plan  that  the  contributions  are  to  continue  for  twenty-five 
years  when  the  employe  can  give  twenty-five  or  more  years  of  service 
before  reaching  the  standard  age  of  retirement,  and  that  they  are  to  con- 
tinue to  the  standard  age  of  retirement  when  the  employe  cannot  give 
as  much  as  twenty-five  years  of  service  before  reaching  that  age. 
(American  Experience  Table  of  Mortality,  4  per  cent  interest.  Salary 
uniform  for  the  period  and  2  per  cent  deductions  from  accumulations 
to  provide  refunds  after  retirement.) 

TABLE*  I 

PERCENTAGES  OF  SALARY  REQUIRED  TO   PROVIDE  ANNUITIES 

RETIREMENT  ON  ANNUITY  AT  55  RETIREMENT    ON    ANNUITY    AT   60 

AGE                              ANNUITY   50%  OF    SALARY    AGE  ANNUITY  40%  OF  SALARY 

21       .                                                 9.93                      21  5.61 

25                                                      11.62                      25  6.57 

30                                                      14.14                       30  7.99 

35                                                      19.77                      35  9.72 

40                                                        29.41                  ,      40  13.59 

45                                                        49.04                       45  20  21 

50                                                      108.71                        50  33.69 

To  illustrate  the  meaning  of  this  table,  suppose  an  employe  should 
enter  at  age  25  on  a  salary  of  $1000  and  we  desired  to  provide  funds 
for  his  retirement  on  50  per  cent  of  salary  at  age  55.  We  find  from 
the  table  that  in  this  case  there  should  be  set  aside  11.62  per  cent  of 
$1000,  or  $116.20  annually  for  25  years.  If  the  standard  age  of 
retirement  were  60  and  the  annuity  to  be  provided  were  40  per  cent 
of  salary,  the  table  shows  that  there  should  be  set  aside  6.57  per  cent 


42  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

of  $1000,  or  $65.70  annually  for  25  years.  The  difference  in  cost  is 
certainly  very  striking. 

Next,  suppose  the  employe  gets  an  increase  of  $300  in  salary  at 
age  30,  the  contributions  on  account  of  this  increase  would  be  made 
for  the  remainder  of  the  first  twenty-five  years  of  service.  That  is 
to  say,  on  this  $300,  for  the  employe  retiring  at  the  age  of  55,  it  would 
be  necessary  to  set  aside  annually  for  20  years  16.26  per  cent  of  $300, 
or  $48.78  in  addition  to  the  $116.20  per  year  mentioned  above.  For 
the  employe  with  standard  age  of  retirement  60,  in  order  to  provide 
the  annuity  of  40  per  cent  of  salary,  it  would  be  necessary  to  set  aside 
annually  for  twenty  years  9.17  per  cent  of  $300,  or  $27.51  in  addition 
to  the  $65.70  on  the  first  $1000  of  salary.  The  16.26  per  cent  and 
the  9.17  per  cent  just  mentioned  are  not  obtained  from  Table  I,  but 
are  similar  figures  as  to  contributions  required  where  contributions  are 
to  be  made  for  twenty  years  instead  of  twenty-five  years,  and  where 
the  contributions  begin  at  age  30  instead  of  age  25. 

If  the  employe  entering  at  age  25  gets  an  increase  in  salary  at 
age  40,  the  contributions  on  such  increase  are  made  for  a  period  of 
only  ten  years  if  the  4  per  cent  limitation  on  employe's  contributions 
will,  within  that  period,  permit  the  accumulation  of  enough  funds  to 
provide  the  normal  retirement  annuity ;  but  for  such  a  case,  when 
the  increase  in  salary  is  of  a  substantial  amount,  the  limitation  in 
contributions  will,  in  general,  operate.  When  on  account  of  this 
limitation  in  contributions  the  accumulations  at  the  end  of  the  first 
twenty-five  years  are  not  sufficient  to  provide  an  annuity  of  the  normal 
percentage  of  salary  at  the  standard  age  of  retirement,  contributions 
equal  to  the  limiting  percentage  of  salary  are  continued  beyond  the 
first  twenty-five  years  of  service  until  proper  contributions  have  been 
made  for  a  normal  pension,  or  until  the  standard  age  of  retirement 
is  reached. 

Life  Insurance 

A  general  idea  of  the  percentages  of  salary  required  to  carry  out, 
for  employes  entering  the  service  at  various  ages,  the  provisions  for 
life  insurance,  may  be  gathered  from  the  figures  in  Table  II  given 
below,  and  from  the  comments  which  follow  the  table. 

Table  II  shows  the  annual  premiums  required  beginning  at  the 
ages  shown  and  continuing  to  the  standard  age  of  retirement  to  render 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


4J 


an  insurance  of  -$1000  paid  up  at  the   standard  age  of   retirement. 
(American  Experience  Table  of  Mortality,  3^  per  cent  interest.) 

TABLE    II 

ANNUAL  PREMIUMS  REQUIRED  TO  PROVIDE  LIFE  INSURANCE  OF  $1000. 

AGE  WHEN  STANDARD  AGE  OF  RETIREMENT 

PREMIUMS  BEGIN  AGE  55  AGE  60 

21  $  15.89  $15.08 

25  18.03  16.88 

30  21.74  19.89 

35  27.40  24.20 

40  36.89  30.75 

45  55.81  41.66 

50  111.91  63.20 

To  provide  an  insurance  of  one  and  three-fourths  of  the  annual 
salary,  as  is  the  case  for  policemen  and  firemen,  we  find  from  the 
table  that  it  would  be  necessary  for  the  employe  entering  at  age  25 
with  salary  $1000,  that  there  be  paid  an  insurance  premium  of  $18.03 
per  $1000  of  insurance,  or  $31.55  each  year.  If  the  employe  should 
obtain  an  increase  of  $300  in  salary  at  age  30,  it  would  be  necessary 
to  add  an  insurance  of  $525.  From  the  table  we  find  that  at  age  30 
the  premium  would  be  $21.74  per  $1000,  or  $11.41  for  the  added  $525 
of  insurance. 

If  the  employe  were  other  than  a  policeman  or  a  fireman,  he 
would  be  insured  for  one  and  one-fourth  of  the  annual  salary,  and  the 
premium  would  be.  $21.30  for  an  entrant  at  age  twenty-five.  With 
an  increase  of  salary  of  $300  at  age  30,  his  insurance  would  be  in- 
creased by  $375  at  a  cost  of  $6.71  as  the  annual  premium. 

ON  THE  COST  OF  COMBINED  FEATURES  OF  THE 
STANDARD  PLAN  EXPRESSED  IN  PERCENT- 
AGES OF  SALARY 

By  using  basic  figures  such  as  are  shown  in  Tables  I  and  II  we 
have  found  an  average  cost  of  the  annuity  and  insurance  features 
expressed  in  percentages  of  salary  for  the  typical  long  service  employe 
who  receives  advancement  in  salary  in  accordance  with  an  average 
salary  scale  obtained  from  data  on  the  experience  of  public  employes 
in  the  State  of  Illinois.  Similarly,  by  the  use  of  data  from  the  ex- 
perience of  existing  pension  funds,  and  from  the  experience  of  certain 
companies  and  associations,  we  estimate  roughly  the  average  cost  of 
the  remaining  factors  in  terms  of  percentage  of  salary. 

It  is  the  purpose  of  Table  III  to  give  a  bird's-eye  view  of  the 
average  costs  of  various  features  for  the  typical  long  service  employe 
entering  at  age  26.  These  costs  in  Table  III  are  the  combined  costs 
to  both  employer  and  employe. 


44 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


Table  IV  shows  how  the  combined  costs  exhibited  in  Table  III 
are  distributed  to  the  employer  and  employe  in  the  Standard  Plan. 

TABLE    III 

COMBINED    COSTS    TO    EMPLOYER    AND    EMPLOYE    OF    ANNUITIES    FOR    ALL 

HAZARDS    UNDER    STANDARD    PLAN— ESTIMATES    IN    TERMS    OF 

PERCENTAGES  OF  TYPICAL  EMPLOYE'S   SALARY 

PERCENTAGES 

FOR  EMPLOYES 

OTHER    THAN 

FIREMEN   AND 

POLICEMEN 

— STANDARD 

RETIREMENT 

AGE   60 


ITEM 
No.        HAZARD 


BENEFIT 


BENEFICIARY 


ge 
ffic 


1  —  Old-A 

Inecency 
2—  Death 

a-Due    to    pefornv 
ance   of  dutyf-  • 


PERCENTAGES 
FOR    FIREMEN 

AND 

POLICEMEN 

— STANDARD 

RETIREMENT 

AGE   55 


Retirement     Annuity...  Employe 


Life  Insurance  and  Ex- 

.  tra   Compensation Widow 

Children 


b-Not   due   to    per- 
formance of  duty. Life    Insurance    Widow 

Children 
3— Disability 

a-Due   to   perform- 
ance of  duty*f« . 


b-Not  due  to  Per- 
formance  of 
duty*f  


.Extra    Compensation...  Employe 
Children 


Sickness    and   Accident 
.Insurance    


Employe 
Totals 


11.64% 


0.65%$ 
0.06%$ 

4.0% 
0.3% 


0.55%$ 
0.06%$ 


0.4% 


6.62% 


0.1  % 
0.01% 

2.7% 
0.3% 


0.05% 
0.01% 


0.4% 


17. t 


10.19% 


TABLE    IV 

DISTRIBUTED   COSTS  TO   EMPLOYER  AND   EMPLOYE  OF  ANNUITIES   FOR  ALL 

HAZARDS   UNDER   STANDARD   PLAN— ESTIMATES   IN  TERMS   OF 

PERCENTAGES    OF   TYPICAL   EMPLOYE'S    SALARY 

PERCENTAGES 

PERCENTAGES         FOR  EMPLOYES 

FOR    FIREMEN        OTHER    THAN 

AND  FIREMEN    AND 

POLICEMEN  POLICEMEN 

— STANDARD  — STANDARD 

RETIREMENT          RETIREMENT 

AGE   55  AGE   60 

BENEFIT  BENEFICIARY   EMPL'R  EMPL'E     EMPL'R  EMPL'E 


ITEM 

No.  HAZARD 

l_Old-Age 

Inefficiency     . . . 
2— Death 

a-Due    to    peforn> 
ance  of  dutyf. . 


Retirement    Annuity. ..  Employe          8.73%       2.91%       4.41%       2.21% 


0.65%$ 
0.06%$ 

2.00% 
0.3  % 


0.55%$ 
0.06%$ 


2.00% 


1.35% 


Life  Insurance  and  Ex- 
tra   Compensation Widow 

Children 

b-Not  due    to    per- 
formance of  duty.  Life    Insurance    Widow 

Children 
3 — Disability 

a-Due   to   perform- 
ance of  duty*f...  Extra    Compensation...  Employe 

Children 

b-Not  due  to   Per- 

formance  of     Sickness   and   Accident 

duty*f     Insurance    Employe 

Totals     12.55%       5.11%       6.43%       3.76% 
*Includes    keeping    up    old-age    retirement    and    life    insurance    contributions    for    the 

employe. 

fThis  would  be  practically  zero  in  the  case  of  teachers  and  more  than  the  tabulated 

amount  in  the  case  of  employes  in  the  more  hazardous  employments. 

$From    the    experience    of    the    Chicago    Policemen's    and    Chicago    Firemen's    Funds, 

we  should  expect  this  to  be  a  little  lower  for  policemen  than  the  value  tabulated  and  a  little 

higher  for  firemen. 


%       0.2 


0.1  %. 
0.01% 

1.35% 
0.3  % 


0.05% 
0.01% 


0.2  %       0.2  % 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  45 

Estimates  of  Cost  Vary  in  Accuracy 

There  is  a  very  great  difference  in  the  degree  of  accuracy  in  the 
estimates  for  the  various  items  shown  in  Tables  III  and  IV. 

The  costs  of  the  old-age  retirement  annuities,  and  of  the  life 
insurance  can  be  estimated  pretty  accurately.  The  great  difference 
between  the  costs  of  some  of  the  other  features  for  the  standard  age 
of  retirement — 55,  and  for  the  standard  age  of  retirement — 60,  de- 
pends upon  the  character  of  the  service  involved — the  services  of 
firemen  and  policemen  being  more  hazardous  than  those  in  which  the 
employes  of  other  classes  are  engaged. 

This  accounts  for  the  .55  per  cent  for  fireman  and  policemen  as 
against  the  .05  per  cent  for  other  employes  for  the  item  of  disability 
in  the  performance  of  duty. 

It  should  be  noted  that  the  combined  contributions  from  the 
public  as  employer,  and  from  the  employe,  to  provide  all  the  benefits 
under  the  proposed  Standard  Plan  would  be  equal  to  between  17  and  18 
per  cent  of  annual  salary  for  the  typical  fireman  and  policeman.  They 
would  be  equal  to  between  10  and  11  per  cent  for  the  typical  long 
service  employe  entering  at  the  average  youthful  age  and  obtaining 
advancement  on  the  basis  of  the  average  salary  scale  and  retiring  at 
age  60. 

Also  it  should  be  noted  from  Table  IV  that  for  firemen  and  police- 
men the  costs  of  the  various  features  are  so  distributed  between 
employer  and  employe  that  on  the  average  5.11  per  cent  of  salary  would 
be  deducted  and  an  amount  equal  to  12.55  per  cent  of  salary  would 
be  contributed  by  the  public  as  employer,  making  a  total  of  17.66  per 
cent.  Similarly,  for  employes  other  than  firemen  and  policemen  the 
distribution  of  costs  of  items  is  such  that  on  the  average  3.76  per  cent 
of  salary  would  be  deducted  and  an  amount  equal  to  6.43  per  cent  of 
salary  would  be  contributed  by  the  public  as  employer. 

COST  TO  THE  PUBLIC  OF  ^MEETING  THE  LIABILITIES 
UNDER  THE  STANDARD  PLAN  ON  ACCOUNT  OF 
PRESENT  EMPLOYES  AND  PRESENT  PENSIONERS 

As  will  be  shown  in  the  actuarial  report  on  the  liabilities  on  ac- 
count of  present  pensioners  and  present  employes,  on  behalf  of  whom 
it  is  not  possible  to  accumulate  funds  in  the  future  under  the  Standard 
Plan  of  accumulation,  there  must  be  specified  in  the  act  the  amount, 
for  each  fund,  that  must  be  provided  annually,  for  a  period  of  perhaps 
forty  years,  in  order  to  liquidate  these  liabilities. 


46  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

The  Standard  Plan  is  designed  in  principle  for  future  entrants. 
It  must  also  provide,  however,  for  present  employes.  To  provide  for 
future  entrants  the  regular  contributions  from  employer  and  employe 
provided  in  the  plan  will  suffice.  For  the  existing  liability  on  behalf 
of  present  employes,  however,  those  contributions  will  not  suffice. 
Those  liabilities  will  be  maturing  during  a  period  of  40  or  more  years 
to  come.  As  a  matter  of  practical  financing,  it  is  proposed  that  they 
be  provided  for  by  spreading  the  payments  in  annual  instalments  over 
that  period.  By  some  such  financial  arrangement  it  is  made  possible 
to  include  present  employes  and  present  pensioners  in  a  system  designed 
for  future  entrants,  and  to  bridge  over  the  transition  from  a  period  in 
which  it  is  necessary  to  provide  for  present  employes,  present  pen- 
sioners and  future  entrants  to  the  period  when  it  will  be  necessary  to 
provide  for  future  entrants  alone. 

THE  COST  OF  THE  PROPOSED  STANDARD  PLAN  IN 
RELATION  TO  THE  PROBLEM  OF  TAXATION  IN- 
VOLVED 

The  report  of  the  Illinois  Pension  Laws  Commission  of  1916 
showed  that  under  the  existing  laws  for  policemen's  and  firemen's 
funds,  we  shall  be  led  ultimately  into  a  situation  where  the  pensions 
will  cost  currently  an  amount  equal  to  35  to  36  per  cent  of  the  salaries. 
As  shown  in  the  same  report,  the  payments  to  pensioners  under  the 
existing  funds  for  policemen  and  firemen  were  in  1916  an  amount  equal 
to  a  little  more  than  13  per  cent  of  the  salaries.  While  the  laws  creat- 
ing other  funds  are  not  so  expensive  in  operation  as  those  for  policemen 
and  firemen,  they  will  also  lead  to  situations  where  the  cost  will  be  very 
much  more  than  was  probably  anticipated  at  the  time  of  the  enactment 
of  the  laws. 

Present  Laws  Would  Ultimately  Require  Greater  Taxation  Than 
Standard  Plan 

When  the  amounts  required  to  liquidate,  according  to  the  terms  of 
the  Standard  Plan,  the  liabilities  because  of  present  pensioners  and 
present  employes  are  added  to  those  required  to  be  set  aside  as  current 
contributions  on  behalf  of  the  employe  as  service  is  being  rendered,  we 
face  the  necessity  of  increased  taxation,  but  this  will  be  relatively  much 
less  than  the  taxation  which  would  be  required  after  a  time  if  the 
present  laws  continued  in  operation. 

The  situation  may  be  briefly  stated  by  saying  that  for  some  years 
to  come  the  required  taxes  will  be  greater  than  those  which  have  been 
levied  under  the  laws  now  in  force.  The  rate  of  taxation  is  entirely 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 


47 


inadequate  under  the  existing  laws  and  would  have  to  be  tremendously 
increased  in  the  future  to  carry  out  the  promises.  Although  it  is  true 
that  by  some  gradual  increase  in  taxation  the  current  pensions  could 
be  paid  for  a  few  years  to  come  in  all  the  larger  funds,  yet  the  burden 
would  only  be  pushed  forward  and  would  be  the  greater  when  it  had 
to  be  carried. 

It  should  be  made  clear  that  the  Standard  Plan  would  put  as  great 
a  burden  of  taxation  upon  the  community  during  the  first  years  of  its 
operation  as  it  would  ever  place  on  the  community,  and  this  is  one  of 
its  chief  merits  over  unsound  plans. 

Plan  Provides  for  More  Benefits 

With  respect  to  all  the  funds  except  perhaps  those  for  policemen 
and  firemen  the  proposed  Standard  Plan  involves  a  considerable 
extension  of  benefits  in  addition  to  the  benefits  under  the  present  laws. 
But  the  Standard  Plan  introduces  ages  of  retirement  that  tend  to  de- 
crease the  cost  of  pensions.  The  main  reason  for  the  increase  in 
current  taxation  would  be  to  remove  the  existing  liability  on  account 
of  the  inadequate  accumulation  of  funds  under  existing  laws. 

The  Commission  has,  through  its  careful  study  of  the  pension 
problem,  indicated  in  the  Standard  Plan  a  method  of  distribution  of 
funds  to  carry  out  the  purposes  of  a  pension  system  that  it  believes  to 
be  sound  and  equitable,  but  it  recognizes  that  there  is  involved  in  carry- 
ing out  the  plan  a  problem  of  taxation.  The  Commission  feels  that 
its  functions  are  performed  by  completing  its  investigations  and  by 
submitting  its  recommendations  in  the  form  of  a  proposed  Standard 
Plan  which  it  believes  to  be  practical  and  inherently  desirable.  The 
Commission,  of  course,  has  been  in  no  position  to  make  a  survey  and 
appraisal  of  the  comparative  merits  of  the  proposals  on  various  topics 
before  the  General  Assembly  carrying  demands  upon  the  State  and 
its  municipalities  for  taxation.  The  Commission,  however,  can  report 
that  the  proposal  of  supplementing  with  taxation  the  contributions  of 
employes  for  the  retirement  annuities  and  other  benefits  called  for  in 
the  Standard  Plan  is  sound  as  to  its  own  merits.  These  annuities  and 
benefits,  in  so  far  as  provided  for  by  the  public,  are  a  part  of  the 
employe's  total  compensation  for  services.  There  is  a  public  need 
for  providing  for  these  annuities  and  benefits  and,  therefore,  for  the 
taxation  that  would  be  required  under  the  Standard  Plan. 

It  is  clear  that  the  amount  of  funds  to  be  derived  from  employe's 
contributions  and  taxation  necessary  to  carry  out  the  plan  depends  on 
the  amounts  of  the  pensions  and  other  benefits  to  be  paid  to  the  indi- 
vidual employes  and  other  beneficiaries  involved.  In  proposing  50 


48  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

per  cent  of  final  salary  as  the  amount  of  retirement  annuity  for  police- 
men and  firemen,  and  40  per  cent  for  teachers,  municipal  clerical 
employes,  and  all  others  besides  policemen  and  firemen,  the  Commission 
was  guided  by  the  best  estimate  it  could  make  of  the  amounts  required 
in  relation  to  standard  of  living  to  accomplish  the  purpose  of  meeting 
the  needs  involved  in  the  hazards  of  old-age  inefficiency,  death,  and 
sickness  or  accident,  and  the  purpose  of  bringing  about  the  retirement 
of  each  employe  when  overtaken  by  old-age  inefficiency.  In  arriving 
at  this  estimate  and  in  all  its  considerations  of  the  proper  scale  of 
benefits,  the  Commission  stressed  the  needs  of  the  individual  employe 
and  his  family.  It  also  took  into  account  the  amounts  of  pensions  paid 
in  other  states.  Besides  this  the  Commission,  in  arriving  at  a  standard 
for  measuring  proper  amounts  of  pensions,  took  into  account  to  a  con- 
siderable extent  public  opinion  and  legislative  opinion  as  registered  in 
the  existing  pension  legislation  of  Illinois. 

Establishment  of  Sound  Pension  System  Is  Urged 

The  Commission  has  very  definitely  reached  the  conclusion  that 
a  pension  system  is  desirable  and  necessary,  and  that  in  order  to  have 
the  system  established  on  a  basis  which  will  not  invite  disaster,  it  must 
be  done  along  the  general  lines  proposed.  In  determining  the  amount 
to  be  allowed  for  pensions  or  other  benefits,  due  account  must  be  taken 
of  the  attendant  cost.  On  the  basis  proposed  no  longer  will  pensions 
be  fixed  with  an  eye  which  sees  only  the  benefits  and  fails  to  observe 
the  burdens.  The  establishment  of  a  pension  system  under  the 
Standard  Plan  proposed  means  a  deduction  from  the  employe's  salary 
or  wages  and  a  corresponding  contribution  by  the  public  as  an  employer 
in  accordance  with  precise  calculation. 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 


49 


CHAPTER  IV 


TABLES,    WITH    ACCOMPANYING    EXPLANA- 
TIONS, ILLUSTRATIVE  OF  THE  OPERATION 
OF  THE  ANNUITY  AND  LIFE  INSURANCE 
FEATURES  OF  THE  STANDARD  PLAN 


Amounts  of  Contributions  and  Annuities  Vary  for  Employes  as 
Years  of  Service,  Salaries  and  Ages  at  Entrance  and  Retire- 
ment Vary 

In  this  chapter  are  given  tables  illustrative  of  the  amounts  of  con- 
tributions required  and  the  amounts  of  annuities  and  life  insurance 
provided  under  the  Standard  Annuity  and  Insurance  Plan  proposed  for 
public  service  employes  of  this  State. 

A  statement  of  the  principles  of  the  plan  was  given  in  the  pre- 
ceding chapter,  but  it  still  remains  to  show  the  operation  as  it  would 
affect  individuals  entering  at  various  ages  and  receiving  advancements 
in  salary  in  accordance  with  the  conditions  of  public  employment  in 
Illinois. 

Of  the  classes  of  benefits  recommended  in  the  plan,  old-age 
retirement  annuities  and  life  insurance  involve  varying  amounts  in 
contributions  or  annuities  as  the  lengths  of  service  of  the  employes, 
their  salaries,  and  their  ages  at  entrance  and  retirement  on  annuity 
vary.  It  is,  therefore,  with  old-age  retirement  annuity  and  with  life 
insurance  and  its  attendant  annuities,  namely,  widows'  annuities  and 

survivorship  annuities,  that  this  chapter  will  deal  principally. 

\ 

PROVISIONS  OF  STANDARD  PLAN  AFFECTING  THE 
CALCULATIONS  OF  THIS  CHAPTER 

To  aid  in  connecting  the  tables  of  this  chapter  with  the  features 
of  the  Standard  Plan  involved  in  them,  a  brief  review  of  the  provisions 
of  the  plan  in  so  far  as  they  affect  the  tables  will  be  made. 

Standard  and  Minimum  Ages  of  Retirement 

The  Standard  Plan  provides  that  all  contributions  for  old-age 
retirement  annuity  and  life  insurance  purposes  be  made  before  the 
employe  attains  an  age  called  the  standard  age  of  retirement,  and  that 


50  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

the  amount  of  annuity  which  the  employe  will  receive  and  the  amount 
of  survivorship  annuity  for  his  wife  will  be  determined  on  the  date 
when  the  employe  attains  this  age  if  he  is  then  in  service,  and  will  not 
be  increased  because  of  service  rendered  after  that  date. 

This  age  in  the  case  of  the  police  and  fire  services  is  fixed  at  age 
55,  and  in  the  other  services  at  age  60. 

The  minimum  age  of  retirement  is  an  age  five  years  younger  than 
the  standard  age  of  retirement.  It  is,  therefore,  age  50  in  the  police 
and  fire  services  and  age  55  in  the  other  services. 

Under  the  Standard  Plan  the  minimum  age  of  retirement  is  the 
earliest  age  at  which  an  employe  can  enter  upon  annuity  except  in  the 
case  of  disability. 

Conversion  of  Life  Insurance  Into  Widows'  Annuities 

Under  the  Standard  Plan,  contributions  are  made  directly  for 
old-age  retirement  annuity  and  life  insurance  purposes,  but  not  for 
widows'  annuities.  These  are  provided  for  entirely  through  the 
medium  of  life  insurance. 

When  a  male  employe  dies  while  in  service  before  reaching  age 
55  if  he  be  a  policeman  or  a  fireman,  or  age  60  if  he  be  an  employe  in 
any  other  branch  of  the  service,  leaving  a  widow,  or  if  he  reaches  such 
an  age  while  in  service,  and  has  a  wife,  the  insurance  is  converted  into 
an  annuity  for  the  widow  or  wife.  This  annuity  in  the  Standard  Plan 
is  called  a  widow's  annuity  if  the  employe  dies  before  attaining  the 
standard  age  of  retirement,  and  a  survivorship  annuity  if  he  attains 
the  standard  age  of  retirement. 

Contributions  Made  by  Both  Employer  and  Employe 

The  Standard  Plan  provides  that  contributions  for  old-age  re- 
tirement annuity  and  life  insurance  be  made  by  both  employer  and 
employe. 

For  old-age  retirement  annuity,  the  employer  .contributes  in  the 
ratio  of  three  to  one  with  the  employe  in  the  case  of  a  policeman  or 
a  fireman,  and  in  the  ratio  of  two  to  one  with  the  employe  in  the  case 
of  an  employe  in  any  other  branch  of  service. 

For  life  insurance,  the  employer  contributes  equally  with  the 
employe. 

These  ratios  would  apply  to  all  who  enter  the  service  after  the 
plan  recommended  by  the  Commission  would  take  effect.  They  would 
also  apply  to  those  in  service  when  the  Standard  Plan  would  take 
effect,  except  for  modifications  due  to  inadequate  contributions  in  the 
past  as  compared  with  those  required  under  this  plan. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


51 


In  what  follows,  except  the  concluding  section  under  the  head- 
ing, "Standard  Plan  as  It  Relates  to  Present  Employes,"  the  tables 
and  explanation  refer  to  employes  who  enter  the  service  after  the 
plan  takes  effect.  The  concluding  section  of  the  chapter,  under  the 
heading  mentioned,  refers  to  employes  who  are  in  service  when  the 
plan  takes  effect. 

Mortality  Table  and  Rates  of  Interest 

The  Standard  Plan  provides  that  if  an  employe  withdraws  from 
service  after  at  least  ten  years  of  service  and  after  he  has  attained  at 
least  the  minimum  age  of  retirement,  but  before  he  has  attained  the 
standard  age  of  retirement,  he  may, enter  upon  his  annuity  immediately 
or  defer  entering  upon  it  to  a  later  date,  but  not  to  a  date  later  than 
that  upon  which  he  attains  the  standard  age  of  retirement. 

If  he  defers  entering  upon  his  annuity,  then  the  accumulations  to 
his  credit  when  he  withdraws  from  service  shall  be  improved  at  4  per 
cent  interest  compounded  annually  until  the  time  when  he  enters  upon 
his  annuity.  The  annuity  will  be  of  the  amount  which  the  accumula- 
tions on  the  date  when  he  enters  upon  annuity,  less  a  charge  for  refunds 
as  stated  below,  will  provide  at  his  attained  age  on  the  date  when  he 
enters  upon  his  annuity,  according  to  the  American  Experience  Table 
of  Mortality,  and  4  per  cent  interest. 

The  Standard  Plan  also  provides  that  if  an  employe  withdraws 
from  service  after  at  least  ten  years  of  service  and  before  he  attains 
the  minimum  age  of  retirement,  he  may  enter  upon  his  annuity  when 
he  attains  the  minimum  age  of  retirement  or  at  any  later  date,  but  not 
later  than  the  date  when  he  attains  the  standard  age  of  retirement.  In 
this  case,  the  accumulations  to  the  credit  of  the  employe  upon  the  date 
of  his  withdrawal  from  service  will  be  improved  at  3^2  per  cent  in- 
terest compounded  annually  until  the  date  when  he  enters  upon  annuity 
and  his  annuity  shall  be  computed  as  in  the  case  outlined  above  except 
that  the  interest  rate  will  be  Zl/2  per  cent  instead  of  4  per  cent. 

Computations  for  life  insurance,  under  the  plan,  are  to  be  made 
according  to  the  American  Experience  Table  of  Mortality  and  3j/2  per 
cent  interest. 

Amount  of  Accumulation  to  the  Credit  of  an  Employe  for  Annuity 
Purposes 

The  amount  of  accumulation  to  the  credit  of  an  employe  for  an- 
nuity purposes  is : 

The  accumulation  of  the  total  amount  of  contributions  of  both 
employer  and  employe,  if  the  employe  was  in  service  for  at  least  twenty 
years  before  he  attained  the  standard  age  of  retirement,  or 


52  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

The  accumulation  of  the  total  amount  of  contributions  made  by 
himself,  and  one-tenth  of  the  accumulations  from  contributions  of  the 
employer  for  each  complete  year  of  service  given  in  addition  to  ten 
full  years  of  service,  if  the  employe  was  in  service  for  less  than  twenty 
years  before  he  attained  the  standard  age  of  retirement. 

Refunds 

The  Standard  Plan  requires  that  a  deduction  of  2  per  cent  of  the 
accumulations  for  old-age  retirement  annuity  be  made  to  provide  for 
refunds  of  the  employe's  contributions  and  the  amount  of  life  insurance 
carried  by  the  employe  over  the  amounts  paid  in  annuity  to  the  employe 
and  those  deriving  annuity  through  him.  In  the  tables  involving  ratios 
of  contributions,  and  accumulations,  that  follow,  the  amounts  stated 
are  sufficient  to  provide  the  annuity  after  this  deduction  is  made. 

Limitation  on  Contributions 

The  Standard  Plan  provides  that  contributions  of  an  employe  for 
old-age  retirement  annuity,  during  any  year,  shall  not  exceed  4  per 
cent  of  the  salary  of  the  employe,  and  that  contributions  of  the  em- 
ployer on  behalf  of  the  employe  for  old-age  retirement  annuity  shall 
not  exceed  an  amount  equal  to  8  per  cent  of  the  salary  of  the  employe 
in  the  case  of  an  employe  other  than  a  policeman  or  a  fireman,  or  12 
per  cent  of  the  salary  in  the  case  of  a  policeman  or  a  fireman. 

When  the  contributions  required  to  provide  the  normal  annuity 
would  exceed  such  percentages,  then  only  such  percentages  are  to  be 
contributed  and  the  annuity  will  be  such  as  the  accumulations  from  such 
contributions  will  provide. 

Contributions  towards  life  insurance  on  the  part  of  the  employe 
during  any  year  are  not  to  exceed  2  per  cent  of  the  salary  of  the  em- 
ploye, and  on  the  part  of  the  employer  are  not  to  exceed  an  amount 
equal  to  2  per  cent  of  the  salary  of  the  employe. 

Period  in  Which  Contributions  for  Old-age  Retirement  Annuity 
Will  Be  Made 

Under  the  Standard  Plan,  contributions  by  and  on  behalf  of  an 
employe,  for  old-age  retirement  annuity,  are  to  begin  when  the  em- 
ploye enters  the  service  and  continue  until  he  attains  the  standard  age 
of  retirement,  except  that  if  the  employe  enters  the  service  at  an  age 
which  will  permit  of  a  greater  period  of  service  before  attainment  of 
the  standard  age  of  retirement  than  twenty-five  years,  then  contribu- 
tions by  employer  and  employe,  because  of  original  salary  and  in- 
creases in  salary,  are  to  be  made  during  the  first  twenty-five  years  of 
service. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  53 

When  the  employe  enters  the  service  at  an  age  which  will  permit 
of  more  than  twenty-five  years  of  service  before  he  attains  the  standard 
age  of  retirement,  and  by  reason  of  the  limitation  in  contributions, 
the  accumulation  at  the  end  of  the  twenty-five  year  period  is  not  suf- 
ficient to  provide  the  normal  annuity,  then  both  employer  and  employe 
are  to  continue  contributions"  of  the  maximum  percentages  until  the 
accumulation  is  sufficient  to  provide  the  normal  annuity,  but  not  to 
extend  beyond  the  time  when  the  employe  attains  the  standard  age 
of  retirement. 

For  instance,  if  an  employe  enters  a  service  at  age  26  where  the 
standard  age  of  retirement  is  60,  then,  unless  the  limitation  on  con- 
tributions applies,  all  contributions  for  old-age  retirement  annuity  will 
be  made  during  the  first  twenty-five  years  of  service  or  before  the 
employe  attains  age  51.  If  the  limitation  on  contributions,  however, 
should  apply,  then  employer  and  employe  continue  contributions  of  the 
maximum  amounts  until  the  accumulation  is  sufficient  to  provide  the 
normal,  annuity,  but  not  after  the  employe  attains  the  standard  age  of 
retirement. 

Period  in  Which  Contributions  for  Life  Insurance  Will  Be  Made 

Contributions  for  life  insurance  are  not  limited  to  the  first  twenty- 
five  years  of  service  when  the  employe  enters  at  an  age  which  will 
permit  of  more  than  twenty-five  years  of  service  before  he  attains  the 
standard  age  of  retirement,  but  extend  in  all  cases  from  the  date  when 
the  employe  enters  the  service  to  the  date  when  he  attains  the  standard 
age  of  retirement. 

OLD-AGE  RETIREMENT  ANNUITY 

Tables  I  to  XVII  inclusive  refer  to  contributions  required  for 
old-age  retirement  annuity,  illustrations  showing  accumulations  of  such 
contributions  and  amounts  of  annuities  available  from  such  accumula- 
tions under  specified  conditions. 

It  will  be  noted  that  age  26* is  taken  as  the  entrance  age  in  the 
illustrations.  This  figure  was  adopted  because  it  happens  to  be  roughly 
the  average  age  at  entrance  into  service  of  employes  in  several  of  the 
more  important  service. 

Salary  Scales 

Tables  illustrative  of  the  amounts  of  contributions  required  from 
employes  and  employers  and  the  amounts  of  annuity  provided  are  of 
greatest  value  when  they  approach  most  nearly  to  actual  experience  in 
the  way  of  increases  in  salaries.  To  illustrate  all  possible  cases  of 
increase  of  salary  or  even  a  majority  of  cases  that  might  arise,  would 


54  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

be  an  impossibility,  but  a  good  approximation  may  be  made  for  any 
individual  case  by  reference  to  the  illustrations  under  one  of  the  three 
following  salary  scales: 

SALARY  SCALE   I— CHICAGO  TEACHERS'   SALARY   SCALE 

YEARS   OF  YEARS   OF 

SERVICE  SALARY       SERVICE  SALARY 

1    $800  7    ..$1100 

2    850  8    1150 

3    900  9    1200 

4     950  10 1260 

5    1000  11    1380 

6    1050  12    and    after 1500 

SALARY  SCALE  II— MUNICIPAL  CLERICAL  SERVICE  SALARY  SCALE 
YEARS   OF  YEARS   OF 

SERVICE  SALARY       SERVICE  SALARY 

1    $960  8    $1320 

2  1080  9    1320 

3  1200  10    1440 

4  1200  11 1440 

5  1320  12    1680 

6  1320  13   and   after 1740 

7  1320 

SALARY    SCALE    III— POLICEMEN'S  AND    FIREMEN'S    SALARY    SCALE 

YEARS   OF  YEARS   OF 

SERVICE  SALARY  SERVICE  SALARY 

1   $1260       3  $1470 

2  1380       4  and  after 1500 

In  Scale  I,  the  salary  quoted  follows  approximately  the  salary 
scale  of  the  Chicago  public  school  teachers  of  grammar  school  grade. 
Illustrations  following  this  scale  will  apply  roughly  to  all  employes  in 
a  service  where  the  standard  age  of  retirement  is  60  and  salaries  in- 
crease within  the  first  twelve  years  of  service  to  amounts  almost  double 
the  amounts  of  the  original  salaries.  In  any  such  specific  case,  the 
percentage  of  contributions  will  be  roughly  as  given  below  (see  Table 
I)  for  this  scale,  while  the  annuity  will  be  40  per  cent  of  the  salary 
to  which  the  percentage  of  contributions  is  applied. 

In  Scale  II,  the  salary  quoted  follows  roughly  the  salary  of  an 
employe  in  the  clerical  service  of  the  City  of  Chicago.  It  will  be  ob- 
served by  comparing  the  tables  founded  on  this  salary  scale  with  those 
founded  on  Scale  I,  that  the  percentages  of  contributions  vary  only 
slightly  as  between  the  two  sets  of  tables. 

In  Scale  III,  the  salary  quoted  follows  the  salary  scale  of  a  Chicago 
policeman  of  the  rank  of  police  patrolman,  or  a  fireman  of  correspond- 
ing rank  in  the  fire  department.  Inasmuch  as  the  entire  increase  in 
salary  occurs  during  the  first  few  years  of  service,  the  illustrations 
following  this  scale  will  apply  with  considerable  accuracy  to  any  police 
or  fire  service. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  53 

Illustrative  Tables  Showing  the  Contributions  Required  When  the 
Employe  Enters  the  Service  at  an  Age  Which  Will  Permit 
of  Twenty-five  or  More  Years  of  Service  Before  He  Attains 
the  Standard  Age  of  Retirement 

Table  I  shows  the  combined  percentages  of  salary  to  be  contributed 
by  employer  and  employe  at  the  respective  ages  of  entrance  given  in 
the  table,  to  produce  an  annuity  of  40  per  cent  of  salary,  when  the 
standard  age  of  retirement  is  60  and  the  salary  of  the  employe  follows 
the  Chicago  Teachers'  Salary  Scale. 

Table  II  shows  the  contributions  under  like  conditions  as  in  Table 
I  when  the  salary  of  the  employe  follows  the  Municipal  Clerical  Service 
Salary  Scale. 

Table  III  applies  when  the  standard  age  of  retirement  is  55  and 
the  salary  of  the  employe  follows  the  Policemen's  and  Firemen's  Salary 
Scale. 

To  illustrate  how  these  tables  were  constructed  consider  the  case 
of  an  employe  who  enters  a  service  at  age  26,  where  the  standard  age 
of  retirement  is  60,  and  whose  salary  is  that  of  the  Chicago  Teachers' 
Salary  Scale. 

It  is  known  that  it  requires  $1010.10  to  provide  an  annuity  of  $100 
per  year,  payable  in  twelve  equal  monthly  instalments  beginning  at  age 
60,  according  to  the  American  Experience  Table  of  Mortality,  and 
4  per  cent  interest.  When  an  amount  sufficient  to  permit  of  a  discount 
of  2  per  cent  for  refunds  is  added  to  this  amount,  the  result  is  $1030.71. 
Under  the  plan,  there  must,  therefore,  be  an  accumulation  of  $1030.71 
at  age  60  for  each  $100  to  be  paid  in  annuity. 

In  the  illustration  the  employe  has  a  salary  of  $800  at  the  outset 
and,  therefore,  an  annuity  expectation  of  $320 — namely,  40  per  cent 
of  salary,  and  is  aged  26. 

It  will,  therefore,  be  necessary  to  find  the  amount  that  must  be 
paid  each  year  for  twenty-five  years  in  order  that  the  payments  will 
accumulate  at  4  per  cent  interest  to  an  amount  at  the  end  of  the  twenty- 
five  year  period,  or  when  the  employe  is  age  51,  which,  when  accumu- 
lated at  interest  for  the  remaining  nine  years  until  the  employe  reaches 
age  60,  will  amount  to  three  and  two-tenths  times  $1030.71,  or  $3298.27. 
This  amount  when  payable  in  equal  monthly  instalments  is  found  to 
be  $4.55  per  month,  or  6.83  per  cent  of  the  salary  of  the  employe. 

This  percentage  is  found  opposite  the  first  year  of  service  under 
age  26  at  entrance  in  Table  I. 

At  the  beginning  of  the  next  year,  the  employe  received  a  raise  in 
salary  of  $50  and  has,  therefore,  an  increase  in  annuity  expectation 
s 


56  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

of  $20.  The  amount  to  be  accumulated  at  age  51  for  this  increase  in 
annuity  must,  therefore,  be  twenty  three-hundred-and-twentieths 
(20/320)  of  the  amount  to  be  accumulated  because  of  initial  annuity 
expectations.  This  amount,  however,  must  be  raised  in  twenty-four 
years  instead  of  twenty-five  years,  as  was  the  case  during  the  first 
service  year. 

The  percentage  of  $50  required  in  contributions  for  twenty-four 
years  to  produce  an  amount  at  age  51,  which,  when  accumulated  to  age 
60,  will  amount  to  twenty  three-hundred-and-twentieths  (20/320)  of 
$1030.71  is  found  to  be  7.34  per  cent. 

During  the  second  year  of  service  the  contributions  will,  therefore, 
be  6.83  per  cent  of  $800,  or  $54.64,  plus  7.34  per  cent  of  $50,  or  $3.67. 
The  total  of  these  two  amounts  is  $58.31,  or  6.86  per  cent  of  the  salary 
of  the  year,  namely,  $850.  This  percentage  is  found  opposite  the 
second  year  of  service  under  age  26  at  entrance  in  Table  I. 

This  illustration  shows  how  all  the  percentages  given  in  Table  I 
could  be  derived. 

The  percentages  in  Table  II  are  derived  in  an  exactly  similar 
manner. 

In  Table  III  the  standard  age  of  retirement  is  age  55  instead  of 
age  60,  as  is  the  case  in  each  of  the  other  tables,  and  consequently 
the  amount  of  accumulation  necessary  to  provide  an  annuity  of  $100 
per  annum  beginning  at  the  standard  age  of  retirement  will  not  be 
$1030.71  as  in  Tables  I  and  II.  In  this  case  it  is  found  to  be  $1200. 
In  other  respects  the  method  of  derivation  of  the  percentages  of  salary 
required  to  provide  an  annuity  of  50  per  cent  of  salary  is  exactly  the 
same  as  that  used  in  deriving  the  percentages  in  Tables  I  and  II. 

TABLE    I— CHICAGO    TEACHERS'    SALARY    SCALE 

TABLE  SHOWING  THE  COMBINED  PERCENTAGES  OF  SALARY  REQUIRED 
FROM  EMPLOYER  AND  EMPLOYE  TO  PROVIDE  AN  OLD  AGE  RETIREMENT 
ANNUITY  OF  40  PER  CENT  OF  SALARY.  STANDARD  AGE  OF  RETIREMENT  60. 
OF  THESE  PERCENTAGES  THE  EMPLOYER  CONTRIBUTES  TWO-THIRDS  AND 
THE  EMPLOYE  ONE-THIRD. 

YEARS   IN  AGE  AT  ENTRANCE  INTO   SERVICE 

SERVICE  SALARY  19  23  26  30  35 

1     $800  5.19  6.07  6.83  7.99  9.72 

2    850  5.21  6.10  6.86  8.03  9.77 

3    *. 900  5.25  6.14  6.91  8.08  9.83 

4    950  5.31  6.21  6.98  8.17  9.94 

5  1000  5.38  6.29  7.08  8.28  10.07 

6  1050  5.47  6.39  7.19  8.41  10.23 

7  1100  5.57  6.53  7.34  8.59  10.45 

8  1150  5.70  6.67  7.50  8.77  10.67 

9  1200  5.84  6.84  7.69  9.00  10.95 

10    1260  6.02  7.06  7.94  9.29  11.30 

11     1380  6.44  7.55  8.49  9.93  12.08 

12  and     after 1500  6.87  9.05  9.05  10.59  12.88 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 


57 


TABLE  II— MUNICIPAL  CLERICAL  SERVICE  SALARY  SCALE 
TABLE  SHOWING  THE  COMBINED  PERCENTAGES  OF  SALARY  REQUIRED 
FROM  EMPLOYER  AND  EMPLOYE  TO  PROVIDE  AN  OLD-AGE  RETIREMENT 
ANNUITY  OF  40  PER  CENT  OF  SALARY.  STANDARD  AGE  OF  RETIREMENT  60. 
OF  THESE  PERCENTAGES  THE  EMPLOYER  CONTRIBUTES  TWO-THIRDS  AND 
THE  EMPLOYE  ONE-THIRD. 


YEARS   IN 
SERVICE 


AGE  AT  ENTRANCE  INTO  SERVICE 


SALARY 


1  $960 

2  1080 

3  1200 

4  1200 

5  1320 

6  1320 

7  1320 

8  1320 

9  1320 

10  1440 

11 1440 

12  1680 

13  1740 


19 
5.19 

5.22 
5.29 
5.29 
5.43 
5.43 
5.43 
5.43 
5.43 
5.80 
5.80 
6.66 
6.88 


23 
6.07 
6.11 
6.19 
6.19 
6.35 
6.35 
6.35 
6.35 
6.35 
6.78 
6.78 
7.79 
8.05 


26 
6.83 
6.87 
6.96 
6.96 
7.14 
7.14 
7.14 
7.14 
7.14 
7.63 
7.63 
8.76 
9.05 


30 
7.99 
8.04 
8.14 
8.14 
8.35 
8.35 
8.35 
8.35 
8.35 
8.93 
8.93 
10.25 
10.59 


35 

9.71 

9.78 

9.91 

9.91 

10.16 

10.16 

10.16 

10.16 

10.16 

10.86 

10.86 

14.59 

15.07 


TABLE  III— POLICEMEN'S  AND  FIREMEN'S  SALARY  SCALE 
TABLE  SHOWING  THE  COMBINED  PERCENTAGES  OF  SALARY  REQUIRED 
FROM  EMPLOYER  AND  EMPLOYE  TO  PROVIDE  AN  OLD-AGE  RETIREMENT 
ANNUITY  OF  50  PER  CENT  OF  SALARY.  STANDARD  AGE  OF  RETIREMENT  55. 
OF  THESE  PERCENTAGES  THE  EMPLOYER  CONTRIBUTES  THREE-FOURTHS 
AND  THE  EMPLOYE  ONE-FOURTH. 

AGE  AT  ENTRANCE  INTO   SERVICE 

21  23  26  28  30 

9.95     10.76     12.10     13.09     14.16 

10.00     10.82     12.17     13.16     14.24 

10.08     10.90     12.26     13.26     14.34 

10.12     10.94     12.31     13.31     14.40 


YEARS  IN 
SERVICE 

1  .'. 

2  1380 

3  1470 

4  .  .  1500 


SALARY 
$1260 


Combined  Total  Percentages  Given  in  Tables  I,  II,  and  III 

In  Tables  I,  II  and  III  above,  the  percentages  of  salary  given  are 
the  combined  percentages  of  employer  and  employe,  and  for  both 
original  salary  and  increases. 

If  the  employe  receives  no  increase  in  salary  during  his  period  of 
service,  the  combined  percentages  of  salary  for  contributions  of  em- 
ployer and  employe  will  be  that  stated  in  the  appropriate  table  opposite 
the  first  year. 

Since  the  employer  contributes  in  the  ratio  of  two  to  one  with 
the  employe  in  all  cases  except  those  of  policemen  and  firemen,  and 
in  the  ratio  of  three  to  one  in  the  cases  of  policemen  and  firemen,  the 
percentages  to  be  contributed  by 'the  employer  and  employe  in  cases 
where  Table  I  or  Table  II  applies  are  respectively  two-thirds  and  one- 
third  of  the  percentages  stated  in  these  tables,  and  the  percentages  to 
be  contributed  by  employer  and  employe  in  cases  where  Table  III 
applies  are  respectively  three-fourths  and  one-fourth  of  the  percentages 
given  in  that  table. 

How  Percentages  of  Salary  May  Be  Found  for  Ages  Not  Given  in 
Table  I,  II,  or  III 

The  required  percentage  for  any  age  below  age  35  where  the 
standard  age  of  retirement  is  60,  or  below  age  30  where  the  standard 
age  of  retirement  is  55,  may  be  found  by  multiplying  the  percentage 


58  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

for  the  next  lowest  age  given  in  the  Table  by  1.04  as  many  times  as 
there  are  years  of  difference  between  the  age  at  which  the  percentage 
is  sought  and  the  next  lowest  age  at  which  the  percentage  is  given  in 
the  Table.  Thus  to  find  the  percentage  required  during  the  first  year 
if  the  employe  entered  a  service  at  age  21,  where  the  standard  age  of 
retirement  is  60,  multiply  5.19  by  1.04.  The  result  is  5.40.  Multiply 
5.40  by  1.04.  The  result  is  5.62.  This  is  the  percentage. required. 

The  percentage  required  for  any  age  above  35  where  the  standard 
age  of  retirement  is  60,  or  above  30  where  the  standard  age  of  retire- 
ment is  55,  can  be  found  respectively  from  Table  IV  or  V. 

Illustrative  Tables  from  Which  May  Be  Derived  the  Contributions 

Required  When  the  Employe  Enters  the  Service  at  an  Age 

Which  Will  Not  Permit  of  at  Least  Twenty-five  Years  of 

Service  Before  He  Attains  the  Standard  Age  of  Retirement 

Tables  I,   II  and  III  above  illustrate  the  percentages  of  salary 

required  for  old-age  annuity  purposes  under  certain  salary  scales  when 

the  employe  enters  the  service  at  an  age  which  will  permit  of  at  least 

twenty-five  years  of   service  before  he  attains  the  standard  age  of 

retirement.     In  those  tables  the  percentage  opposite  the  first  year  of 

service  shows  the  percentage  of  salary  required  if  the  employe  receives 

no  increase  in  salary  during  his  period  of  service. 

If  an  employe  enters  the  service  at  an  age  which  will  not  permit 
of  at  least  twenty-five  years  of  service  before  he  attains  the  standard 
age  of  retirement,  the  percentage  of  salary  that  would  need  to  be  con- 
tributed on  the  supposition  that  he  will  receive  no  increase  in  salary 
during  his  period  of  service  is  as  given  in  Table  IV  or  V,  according  to 
whether  or  not  the  standard  age  of  retirement  is  60  or  55. 

TABLE    IV 

TABLE  SHOWING  THE  COMBINED  PERCENTAGES  OF  SALARY  REQUIRED 
FROM  EMPLOYER  AND  EMPLOYE  TO  PROVIDE  AN  ANNUITY  OF  40  PER  CENT 
OF  SALARY  WHEN  THE  EMPLOYE  ENTERS  THE  SERVICE  AT  THE  AGE  AT  EN- 
TRANCE SHOWN  IN  THE  TABLE  AND  THERE  IS  NO  INCREASE  IN  SALARY 
DURING  HIS  PERIOD  OF  SERVICE.  OF  THESE  PERCENTAGES  THE  EMPLOYER 
CONTRIBUTES  TWO-THIRDS  AND  THE  EMPLOYE  ONE-THIRD. 

STANDARD   AGE    OF   RETIREMENT   60 

AGE  AT  PERCENTAGE         AGE  AT  PERCENTAGE 

ENTRANCE  OF  SALARY         ENTRANCE  OF  SALARY 

36  .  10.31  48     26.93 

37  11.05  49  30.00 

38  11.82  50  33.69 

39  12.66  51  38.23 

40  13.59  52  43.90 

41  14.63  53  51.22 

42  15.77  54  61.00 

43  17.07  55  74.68 

44  18.53  56  95.27 

45  20.21  57  129.60 

46  21.14  58  198.32 

47  24.34  59  404.43 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


59 


TABLE    V 

TABLE  SHOWING  THE  COM  INN  ED  PKRCKXTAGES  OF  SALARY  REQUIRED 
FROM  EMPLOYER  AND  EMPLOYE  TO  PROVIDE  AN  ANNUITY  OF  50  PER  CENT 
OF  SALARY  WHEN  THE  EMPLOYE  ENTERS  THE  SERVICE  AT  AGE  AT  ENTRANCE 
SHOWN  IN  THE  TABLE  AND  THERE  IS  NO  INCREASE  IN  SALARY  DURING 
HIS  PERIOD  OF  SERVICE.  OF  THESE  PERCENTAGES  THE  EMPLOYER  CON- 
TRIBUTES  THREE-FOURTHS  AND  THE  EMPLOYE  ONE-FOURTH. 


AGE  AT 
ENTRANCE        •  OF  SALARY 

31  15.07 

32  16.08 

33  , 17.19 

34  18.42 

35  19.77 

36  21.28 

37  22.96 

38  24.85 

39  26.98 

40  29.41 

41  32.19 

42  .  ..35.42 


STANDARD   AGE   OF   RETIREMENT   55 
PERCENTAGE         AGE  AT 
ENTRANCE 


PERCENTAGE 
OF  SALARY 

^3  39.19 

44  43.66 

45  49.04 

46  55.64 

47  63.90 

48  74.55 

49  88.78 

50  108.71 

51  138.66 

52  188.64 

53  288.67 

54  .  588.68 


It  will  be  observed  that  in  Table  IV  the  percentage  beginning  at 
age  39  exceeds  the  12  per  cent  limitation  imposed  on  contributions  by 
and  on  behalf  of  employes  other  than  policemen  and  firemen,  and  in 
Table  V  that  the  percentage  beginning  at  age  32  exceeds  the  16  per 
cent  limitation  imposed  on  contributions  by  and  on  behalf  of  policemen 
and  firemen. 

Such  percentages,  however,  have  a  place  in  these  tables  because 
they  show  the  percentages  required  in  cases  of  increases  in  salary 
where  the  contributions  formerly  being  made  together  with  the  per- 
centage of  salary  stated  in  the  table  do  not  exceed  the  limitation  of  12 
per  cent  or  16  per  cent  of  the  total  increased  salary. 

Use  of  Tables  IV  and  V 

Tables  IV  and  V  above  may  be  used  to  find  the  contributions 
required  when  the  salary  of  the  employe  follows  any  salary  scale.  It 
will  be  seen,  however,  upon  application  of  any  salary  scale,  that  the 
percentages  that  would  be  required  will  soon  exceed  the  limitation 
imposed  on  contributions. 

By  reference  to  Table  I  it  is  seen  that  when  the  salary  of  an  em- 
ploye follows  the  Chicago  Teachers'  Salary  Scale,  the  limitation  in 
contributions  applies  after  the  tenth  year  of  service  when  the  employe 
is  aged  35  at  entrance.  By  reference  to  Table  II,  it  is  seen  that  when 
the  salary  follows  the  Municipal  Clerical  Service  Salary  Scale  the 
limitation  applies  after  the  eleventh  year  of  service  when  the  employe 
is  aged  35  at  entrance. 

Tables  IV  and  V  show  that  the  limitation  in  contributions  applies 
from  the  beginning  of  service  in  the  cases  of  employes,  other  than 
policemen  or  firemen,  who  enter  the  service  after  age  38  and,  in  the 
cases  of  policemen  or  firemen,  those  who  enter  the  service  after  age  31. 


60  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Accumulations  from  Contributions  Made  for  Old-Age  Retirement 
Annuity 

To  illustrate  how  the  contributions  made  by  employer  and  employe 
for  old-age  retirement  annuity  will  accumulate,  consider  the  case 
where  the  percentages  of  salary  required  are  as  in  Table  I  when  the 
employe  is  aged  26  at  entrance  to  service,  and  the  salary  scale  is  the 
scale  in  that  table. 

From  that  table  we  find  that  the  salary  of  the  first  year  is  $800 
and  the  percentage  to  be  contributed  is  6.83.  The  product  of  $800  by 
6.83  per  cent,  is  $54.64.  This  amount  payable  in  equal  monthly  in- 
stalments is  equivalent  to  $55.66,  payable  at  the  end  of  the  year. 

During  the  second  year,  the  contributions  required  will  be  $850 
multiplied  by  6.86  per  cent,  or  $58.31,  which  is  equivalent  to  $59.37 
paid  at  the  end  of  the  year. 

If  $55.66  be  improved  at  4  per  cent  interest  for  one  year,  the 
result  is  $57.89.  This  amount  when  added  to  $59.37  gives  $117.26, 
which  is,  therefore,  the  accumulation  at  the  end  of  the  second  year. 

The  above  process  may  be  continued  until  the  end  of  the  twenty- 
fifth  year  of  service,  at  which  time  all  contributions  will  have  been 
made.  After  that,  the  accumulations  increase  only  through  interest 
earnings. 

The  accumulations  for  all  years  are  given  in  Table  VI,  below. 

Tables  VII  and  VIII  below  are  constructed  in  an  exactly  similar 
manner.  Table  VII  is  constructed  on  the  Municipal  Clerical  Service 
Salary  Scale,  and  Table  VIII  on  the  Policemen's  and  Firemen's  Salary 
Scale. 

TABLE  VI— CHICAGO  TEACHERS'   SALARY   SCALE 

TABLE  SHOWING  THE  ACCUMULATIONS  FOR  OLD-AGE  RETIREMENT 
ANNUITY  AT  THE  ENDS  OF  THE  SEVERAL  SERVICE  YEARS  FROM  CONTRI- 
BUTIONS OF  PERCENTAGES  OF  SALARY  AS  STATED  IN  TABLE  I  AT  AGE  26  AT 
ENTRANCE  INTO  SERVICE.  STANDARD  AGE  OF  RETIREMENT  60.  OF  THESE 
PERCENTAGES  THE  EMPLOYER  CONTRIBUTES  TWO-THIRDS  AND  THE  EM- 
PLOYE ONE-THIRD. 
END  OF  ACCUMULATION  END  OF  ACCUMULATION 

1st  year $  55.66     18th  year $2471.38 

2d  year 117.26     19th  year 2708.54 

3d  year 184.28     20th  year 2955.18 

4th  year 259.22     21st  year 3211.69 

5th  year 341.69     22d  year 3478.46 

6th  year 432.34     23d  year 3755.90 

7th  year 531.84     24th  year 4044.44 

8th  year 640.97     25th  year 4344.52 

9th  year 760.52     26th  year 4518.20 

10th  year -. 892.95     27th  year 4699.03 

llth  year 1047.97     28th  year 4886.99 

12th  year 1228.19     29th  year 5083.02 

13th  year 1415.62     30th  year 5286.34 

14th  year 1610.54     31st  year 5497.80 

15th  year 1813.26     32d  year 5717.71 

16th  year 2024.09     33d  year 5946.42 

17th  year 2243.35     34th  year 6184.28 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 


61 


TABLE  VII— MUNICIPAL  CLERICAL  SERVICE  SALARY  SCALE 
TABLE  SHOWING  THE  ACCUMULATIONS  FOR  OLD-AGE  RETIREMENT  AN- 
NUITY AT  THE  ENDS  OF  THE  SK\  RVICE  YEARS  FROM  CONTRIBUTIONS 
OF  PERCENTAGES  OF  SALARY  AS  STATED  IN  TABLE  II  AT  AGE  26  AT 
ENTRANCE  INTO  SERVICE.  STANDARD  AGE  OF  RETIREMENT  60.  OF  THESE 
PERCENTAGES  THE  EMPLOYER  CONTK  1  !U 'TKS  TWO-THIRDS  AND  THE  EM- 
PLOYE ONE-THIRD. 


END  OF  ACCUMULATION 

1st  year $     66.80 

2d  year 145.06 

3d  year 235.94 

4th  year 330.46 

5th  year 439.69 

6th  year 553.29 

7th  year 671.43 

8th  year 794.30 

9th  year 922.08 

10th  year 1070.88 

llth  year 1225.64 

12th  year 1424.59 

13th  year 1641.98 

14th  year 1868.07 

15th  year 2103.13 

16th  year 2347.67 

17th  year 2601.99 


END  OF  ACCUMULATION 

18th  year $2866.48 

19th  year 3141.55 

20th  year 3427.62 

21st    year 3725.13 

22d    year 4034.55 

23d    year 4356.34 

24th  year 4691.00 

25th   year 5039.05 

26th   year 5240.61 

27th   year 5450.23 

28th   year 5668.24 

29th  year 5894.97 

30th   year 6130.77 

31st    year 6376.00 

32d    year 6631.04 

33d     year 6896.28 

34th  year 7172.13 


END  OF 


ACCUMULATION 


TABLE  VIII— POLICEMEN'S  AND  FIREMEN'S  SALARY  SCALE 
TABLE  SHOWING  THE  ACCUMULATIONS  FOR  OLD-AGE  RETIREMENT 
ANNUITY  AT  THE  ENDS  OF  THE  SEVERAL  SERVICE  YEARS  FROM  CONTRI- 
BUTIONS OF  PERCENTAGES  OF  SALARY  AS  STATED  IN  TABLE  III  AT  AGE  26 
AT  ENTRANCE  INTO  SERVICE.  STANDARD  AGE  OF  RETIREMENT  55.  OF 
THESE  PERCENTAGES  THE  EMPLOYER  CONTRIBUTES  THREE-FOURTHS  AND 
THE  EMPLOYE  ONE-FOURTH. 

END  OF  ACCUMULATION 

16th  year    $  4010.62 

17th  year   4359.14 

18th  year   4721.61 

19th  year   5098.57 

20th  year   5490.61 

21st  year    5898.33 

22d    year    6322.36 

23d    year    6763.35 

24th  year    7221.98 


1st  year    $     155.31 

2d    year    332.61 


529.45 
738.73 


3d  year 

4th  year 

5th  year   957.38 

6th  year    1153.78 

7th  year   1419.23 

8th  year    1664.10 

9th  year    1918.76 

10th  year   2183.61 

llth  year    2459.05 

12th  year    2745.51 

1 3th  year    3043.43 

14th  year   3353.27 

15th  year    3675.50 


25th  year  7698.96 

26th  year 8000.96 

27th  year  8321.00 

28th  year 8653.84 

29th  year  9000.00 


Amounts   of   Annuity   Upon   Withdrawal   from    Service    After   at 
Least  Ten  Years  of  Service 

The  Standard  Plan  provides  that  an  employe  who  withdraws  from 
service  after  at  least  ten  years  of  service  and  before  he  attains  the 
minimum  age  of  retirement  may  retain  his  rights  to  annuity  by  allow- 
ing the  accumulations  from  his  own  contributions  to  remain  at  interest 
in  the  fund.  If  he  retains  his  annuity  rights,  then  one-tenth  of  the 
accumulations  of  the  employer  for  each  year  of  service  after  the 
tenth  year  of  service  up  to  one  hundred  per  cent  of  such  accumulations 
will  be  added  to  the  accumulations  from  his  own  contributions  and  the 
total  used  to  provide  an  annuity  beginning  at  the  minimum  age  of 
retirement,  or  at  any  time  later,  but  not  beyond  the  time  when  he 
attains  the  standard  age  of  retirement. 


62  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Tables  IX,  X,  and  XI  below  show  the  amount  of  annuity  to  which 
an  employe  would  be  entitled  who  enters  a  service  at  age  26  where 
the  standard  age  of  retirement  and  salary  scale  are  as  stated  in  the 
tables,  and  withdraws  from  service  after  the  year  stated. 

These  annuities  are  derived  from  the  accumulations  to  the  credit 
of  employes  as  stated  in  Table  VI,  VII,  or  VIII,  whichever  applies. 

To  illustrate  how  to  find  the  amount  of  accumulation  available 
for  annuity  purposes  upon  withdrawal  from  service,  consider  the  illus- 
tration given  in  Table  VI  at  the  end  of  the  sixteenth  year  of  service. 

In  this  case  the  employer  contributes  two-thirds  of  the  whole 
amount  contributed  and  the  employe  one-third.  The  accumulation 
from  contributions  of  the  employer  will,  therefore,  be  two-thirds  of 
$2024.09  and  from  contributions  of  the  employe  one-third  of  $2024.09, 
or  $1349.39  and  $674.70  respectively. 

Now  one-tenth  of  the  accumulation  of  the  employer  is  to  be  added 
to  the  accumulation  from  contributions  of  the  employe  for  each  year 
of  service  after  the  tenth.  In  the  illustration,  therefore,  six-tenths  of 
$1349.39,  or  $809.63,  will  be  added  to  $674.70.  This  makes  a  total  of 
$1484.33.  This  amount  improved  at  interest  at  the  rate  of  3^2  per 
cent  per  annum,  will  accumulate  to  an  amount  which,  after  deduction 
of  2  per  cent  for  refunds,  will  be  sufficient  to  provide  the  annuity  of 
$258  per  annum,  as  stated  in  Table  IX  opposite  the  sixteenth  year, 
beginning  at  the  standard  age  of  retirement. 

It  will  be  observed  that  the  first  few  annuities  in  each  table  are 
under  $180  per  year.  The  Standard  Plan  provides  that  when  an 
annuity  is  less  than  $180  per  year,  it  will  be  paid  in  amounts  of  $180 
per  year  until  the  principal  sum  from  which  the  annuity  is  being  paid 
is  exhausted. 

TABLE  IX 

TABLE  SHOWING  THE  AMOUNTS  OF  ANNUITY  BEGINNING  AT  THE 
STANDARD  AGE  OF  RETIREMENT  WHICH  AN  EMPLOYE  WOULD  RECEIVE,  IF 
HE  ENTERS  THE  SERVICE  AT  AGE  26,  HAD  A  SALARY  AS  STATED  IN  THE 
CHICAGO  TEACHERS'  SALARY  SCALE,  AND  WITHDREW  FROM  SERVICE  AT  THE 
END  OF  THE  YEAR  STATED  IN  THE  TABLE.  STANDARD  AGE  OF  RETIRE- 
MENT 60. 

WITHDREW  AMOUNT  OF       WITHDREW  AMOUNT  OF 

AFTER  ANNUITY  AFTER  .       ANNUITY 

10th    year    $     64  23d     year    $513 

llth    year    86  24th    year    533 

12th   year    114  25th   year    553 

13th    year    145  26th    year    556 

14th    year    180  27th   year    559 

15th   year    217  28th   year    562 

16th    year    258  29th   year    600 

17th    year    301  30th    year    600 

18th   year    347  31st    year    600 

19th    year    396  32d     year    600 

20th   year    447  33d     year    600 

21st    year    470  34th   year    600 

22d     year    491 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 


63 


TABLE  X 

TABLE  SHOWING  Till.  AMOUNT  OF  ANNUITY  BEGINNING  AT  THE 
STANDARD  ^GE  OF  RETIREMENT  WHICH  AN  EMPLOYE  WOULD  RECEIVE 
IF  HE  ENTERED  THE  SERVICE  AT  AGE  26,  HAD  A  SALARY  AS  STATED  IN 
THE  MUNICIPAL  CLERICAL  SERVICE  SALARY  SCALE  AND  WITHDREW  FROM 
SERVICE  AT  THE  END  OF  THE  YEAR  STATED  IN  THE  TABLE.  STANDARD 
AGE  OF  RETIREMENT  60. 
WITHDREW  AMOUNT  OF 

AFTER  ANNUITY 

10th    year    $     76 

llth    year    101 

12th    year    132 

13th    year    169 

14th    year    208 

15th    year    252 

16th    year    299 

17th    year    349 

18th    year    403 


WITHDREW  AMOUNT  OF 

AFTER  ANNUITY 

23d    year  $  594 

24th   year  618 

25th    year  642 

26th    year  645 

27th   year  648 


19th  year  459 

20th  year  519 

21st  year  545 

22d  year  570 


28th  year 
29th  year 
30th  year 
31st  year 
32d  year 
33d  year 
34th  year 


651 
696 
696 
696 
696 
696 
696 


TABLE  XI 

TABLE  SHOWING  THE  AMOUNT  OF  ANNUITY  BEGINNING  AT  THE 
STANDARD  AGE  OF  RETIREMENT  WHICH  AN  EMPLOYE  WOULD  RECEIVE 
IF  HE  ENTERED  THE  SERVICE  AT  AGE  26,  HAD  A  SALARY  AS  STATED  IN 
THE  POLICEMEN'S  AND  FIREMEN'S  SALARY  SCALE  AND  WITHDREW  FROM 
SERVICE  AT  THE  END  OF  THE  YEAR  STATED  IN  THE  TABLE.  STANDARD 
AGE  OF  RETIREMENT  55. 

WITHDREW  AMOUNT  OF 

AFTER  ANNUITY 

$  597 

620 

642 

,     663 


WITHDREW  AMOUNT  OF 

AFTER  .  ANNUITY 

10th    year  $     84 

llth    year  118 

12th   year  157 

13th    year  200 

14th    year  247 

15th    year  297 

16th   year  350 

17th    year  407 

18th   year  468 

19th    year  531 


20th  year  , 

21st  year  , 

22d  year  

23d  year  

24th  year  732 

25th  year  750 

26th  year  750 

27th  year  750 

28th  year  750 

29th  year  750 


Amounts  of  Annuity  at  Standard  Age  of  Retirement 

As  already  stated,  contributions  by  the  employe  for  old-age 
retirement  annuity  during  any  year  of  service,  under  the  Standard 
Plan,  are  not  to  exceed  4  per  cent  of  the  salary  of  the  employe,  and 
contributions  by  the  employer  are  not  to  exceed  amounts  equal  to  8 
per  cent  of  the  salary  of  the  employe  in  all  cases  except  when  the 
employe  is  a  policeman  or  a  fireman  or  12  per  cent  in  the  cases  where 
the  employe  is  a  policeman  or  a  fireman. 

Such  limitation  in  contributions  will  result  in  lower  annuities  than 
amounts  equal  to  40  per  cent  or  50  per  cent  of  salary,  in  cases  where 
the  employe  entered  the  service  or  received  an  increase  in  salary  at  so 
late  an  age  that  the  proper  amounts  could  not  be  contributed  because 
of  this  limitation. 

Tables  XII,  XIII,  and  XIV  below  show  the  amounts  of  annuities 
available  to  employes  who  enter  the  service  at  the  ages  stated  in  the 
appropriate  table  and  receive  the  salary  of  the  scale  given  in  the  table, 
if  they  remain  in  service  until  they  attain  the  standard  age  of  retire- 
ment. 


64  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

TABLE   XII 

TABLE  SHOWING  THE  AMOUNTS  OF  ANNUITIES  AVAILABLE  FOR  EM- 
PLOYES WHO  ENTER  THE  SERVICE  AT  THE  AGES  STATED  IN  THE  TABLE  AND 
REMAIN  IN  SERVICE  UNTIL  THEY  ATTAIN  THE  STANDARD  AGE  OF  RE- 
TIREMENT. CHICAGO  TEACHERS'  SALARY  SCALE.  STANDARD  AGE  OF  RE- 
TIREMENT 60. 

ANNUITY   TO    BEGIN    AT   STANDARD   AGE   OF   RETIREMENT 

AGE  AT  ENTRANCE  AMOUNT  OF       AGE  AT  ENTRANCE  AMOUNT  OF 

INTO   SERVICE  ANNUITY  INTO   SERVICE  ANNUITY 

34  or    less  .....................  $600  42    ...........................  $311 

35  ............................   576  43    ............................  262 

36  ............................    551  44    ............................   219 

37  .......  .....................    524  45    ............................    180 

38  ............................    494  46    ............................    145 

39  ............................   459  47    ............................    115 

40  ............................   424  48    ............................     89 

41  ............................    366 

TABLE   XIII 

TABLE    SHOWING    THE    AMOUNTS    OF    ANNUITIES    AVAILABLE    FOR    EM- 
PLOYES   WHO    ENTER    THE    SERVICE    AT    THE    AGES    STATED    IN    THE   TABLE 
AND    REMAIN    IN    SERVICE    UNTIL    THEY    ATTAIN    THE    STANDARD    AGE    OF 
RETIREMENT.      MUNICIPAL    CLERICAL    SERVICE    SALARY    SCALE.      STANDARD 
AGE  OF  RETIREMENT  60. 

ANNUITY  TO  BEGIN   AT  STANDARD  AGE  OF  RETIREMENT 

AGE  AT  ENTRANCE  AMOUNT  OF       AGE  AT  ENTRANCE  AMOUNT  OF 

INTO   SERVICE  ANNUITY  INTO  SERVICE  ANNUITY 

34   or  less  ......................  $696  42    ............................  $340 

.    35    ............................   669  43    ............................   285 

36  .............................   635  44    ............................   236 

37  ............................   602  45    ............................    192 

38  ...............  .............   585  46    ............................    154 

39  ............................    543  47    .............  .  ..............    120 

40  ............................   468  48    ............................    104 

41  ............................   401 

TABLE    XIV 

TABLE  SHOWING  THE  AMOUNTS  OF  ANNUITIES  AVAILABLE  FOR  EM- 
PLOYES WHO  ENTER  THE  SERVICE  AT  THE  AGES  STATED  IN  THE  TABLE  AND 
REMAIN  IN  SERVICE  UNTIL  THEY  ATTAIN  THE  STANDARD  AGE  OF  RETIRE- 
MENT. POLICEMEN'S  AND  FIRMEN'S  SALARY  SCALE.  STANDARD  AGE  OF 
RETIREMENT  55. 

AN-NUIT.Y  TO  BEGIN  AT  STANDARD  AGE  OF  RETIREMENT 

AGE  AT  ENTRANCE  AMOUNT  OF       AGE  AT  ENTRANCE  AMOUNT  OF 

INTO  SERVICE  ANNUITY  INTO   SERVICE  ANNUITY 

30  or  less  ......................  $750  36    ............................  $493 

31  ............................    730  37    ............................   418 

32  ............................    713  38    ............................   351 

33  ............................   666  39    ............................  290 

34  ..........  .  .................   620  40    ............................   237 

35  ............................    575 

Amounts  of  Annuity  at  Minimum  Age  of  Retirement 

The  Standard  Plan  provides  that  an  employe  may  enter  upon  an- 
nuity at  any  time  after  he  attains  the  minimum  age  of  retirement  pro- 
vided he  has  at  least  ten  years  of  service  to  his  credit;  if  an  employe 
enters  upon  annuity  upon  attainment  of  the  minimum  age  of  retire- 
ment, the  amount  of  annuity  would  be  as  stated  in  Table  XV,  XVI 
or  XVII  below: 


TABLE  SHOWING  THE  AMOUNTS  OF  ANNUITIES  AVAILABLE  FOR  EM- 
PLOYES WHO  ENTER  THE  SERVICE  AT  THE  AGES  STATED  IN  THE  TABLE  AND 
REMAIN  IN  SERVICE  UNTIL  THEY  ATTAIN  THE  MINIMUM  AGE  OF  RETIRE- 
MENT—AGE 55.  CHICAGO  TEACHERS'  SALARY  SCALE.  STANDARD  AGE  OF 
RETIREMENT  60. 

ANNUITY   TO    BEGIN   AT   MINIMUM    AGE   OF    RETIREMENT  —  AGE   55 

AGE  AT  ENTRANCE  AMOUNT  OF       AGE  AT  ENTRANCE  AMOUNT  OF 

INTO   SERVICE  ANNUITY  INTO   SERVICE  ANNUITY 

34  or  less  ......................  $424  38    ............................  $225 

35  ............................   339  39    ............................    188 

36  ............................  299  40    ............................    154 

37  ............................   262 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 


TABLE   XVI 

TABLE  SHOWING  THE  AMOUNTS  OF  ANNUITIES  AVAILABLE  FOR  EM- 
PLOYES WHO  ENTER  THE  SERVICE  AT  THE  AGES  STATED  IN  THE  TABLE  AND 
REMAIN  IN  SERVICE  UNTIL  THEY  ATTAIN  THE  MINIMUM  AGE  OF  RETIRE- 
MENT—AGE 55.  MUNICIPAL  CLERICAL  SERVICE  SALARY  SCALE.  STANDARD 
AGE  OF  RETIREMENT  60. 

ANNUITY   TO   BEGIN   AT   MINIMUM    AGE   OF    RETIREMENT — AGE    55 
AGE  AT  ENTRANCE  AMOUNT  OF       AGE  AT  ENTRANCE  AMOUNT  OF 


INTO   SERVICE 

34  or  less. 

35    

36    

37  . 


ANNUITY 
,..$491 
...   427 
, ..   345 
...   299 


INTO  SERVICE 

38    

39    

40    


ANNUITY 
..$267 
..   223 
.    184 


TABLE  XVII 

TABLE  SHOWING  THE  AMOUNTS  OF  ANNUITIES  AVAILABLE  FOR  EM- 
PLOYES WHO  ENTER  THE  SERVICE  AT  THE  AGES  STATED  IN  THE  TABLE  AND 
REMAIN  IN  SERVICE  UNTIL  THEY  ATTAIN  THE  MINIMUM  AGE  OF  RETIRE- 
MENT—AGE 50.  POLICEMEN'S  AND  FIREMEN'S  SALARY  SCALE.  STANDARD 
AGE  OF  RETIREMENT  55. 

ANNUITY  TO   BEGIN   AT  MINIMUM   AGE  OF   RETIREMENT — AGE   50 
AGE  AT  ENTRANCE  AMOUNT  OF       AGE  AT  ENTRANCE 


INTO  SERVICE 
30  or  less 

ANNUITY 
$532 

31  . 

449 

32  

400 

33  

337 

34   

280 

35  . 

.  .  229 

INTO   SERVICE 

36    

37    

38    

39    

40  ... 


AMOUNT  OF 
ANNUITY 
...$184 
...    144 
...    110 
. ..      80 
...     55 


LIFE  INSURANCE 

Under  the  Standard  Plan,  the  premiums  for  life  insurance  are 
to  be  such  that  the  insurance  will  be  fully  paid  for  when  the  employe 
reaches  the  standard  age  of  retirement. 

Towards  such  premium  payment,  employer  and  employe  are  to 
contribute  in  equal  amounts. 

TABLE  XVIII 

TABLE  SHOWING  THE  AMOUNTS  TO  BE  CONTRIBUTED  BY  THE  EM- 
PLOYER AND  THE  EMPLOYE  IN  PREMIUM  ANNUALLY  AND  THE  TOTAL 
PREMIUM  REQUIRED  FOR  AN  INSURANCE  OF  $1000  TO  BE  PAID  UP  WHEN  THE 
EMPLOYE  ATTAINS  AGE  60.  AMERICAN  EXPERIENCE  TABLE  OF  MORTALITY, 
31A  PER  CENT  INTEREST. 

INSURANCE   FOR   $1000   TO      BE    PAID   UP   AT   AGE   60 

TOTAL  ANNUAL 
AMOUNTS  TO  BE 
CONTRIBUTED 
$  14.69 
15.08 
15.49 
15.92 
16.39 
16.88 
17.41 
17.97 
18.57 
19.21 
19.89 
20.63 
21.43 
22.28 
23.20 
24.20 
25.29 
26.48 
27.77 
29.19 
30.75 
32.48 
34.39 
36.53 


AGE  WHEN 

INSURANCE 

ANNUAL  AMOUNTS  TO 

BE  CONTRIBUTED  BY 

is  TAKEN 

EMPLOYER 

EMPLOYE 

20    

$  7.35 

$  7.35 

21     

7.54 

7.54 

22    

7.75 

7.75 

23     

7.96 

7.96 

24     

8.20 

8.20 

25     

8.44 

8.44 

26     

8.71 

8.71 

27     

8.99 

8.99 

28     

9.29 

9.29 

29    

9.61 

9.61 

30     

9.95 

9.95 

31     

10.32 

10.32 

32     

10.72 

10.72 

33     

11.14 

11.14 

34     

11.60 

11.60 

35     

12.10 

12.10 

36     

12.65 

12.65 

37     

13.24 

13.24 

38     

13.89 

13.89 

39    

14.60 

14.60 

40    

15.38 

15.38 

41     

16.24 

16.24 

42     

17.20 

17.20 

43    

18.27 

18.27 

66 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


AGE  WHEN 

INSURANCE  ANNUAL  AMOUNTS  TO  BE  CONTRIBUTED  BY 

is  TAKEN                                EMPLOYER  EMPLOYE 

44    .....$19.47  $19.47 

45     20.83  20.83 

46     22.39  22.39 

47     24.17  24.17 

48     26.25  26.25 

49     28.69  28.69 


31.60 
35.14 
39.54 
45.16 
52.60 


55  62.95 

56  78.39 

57  103.98 

58  154.94 

59  .  ,..307.32 


31.60 

35.14 

39.54 

45.16 

52.60 

62.95 

78.39 

103.98 

154.94 

307.32 


TOTAL  ANNUAL 

AMOUNTS  TO  BE 

CONTRIBUTED 

$38.94 

41.66 

44.77 

48.34 

52.49 

57.37 

63.20 

70.28 

79.08 

90.31 

105.20 

125.90 

156.78 

207.95 

309.87 

614.64 


TABLE   XIX 

TABLE  SHOWING  THE  AMOUNTS  TO  BE  CONTRIBUTED  BY  THE  EM- 
PLOYER AND  THE  EMPLOYE  IN  PREMIUM  AND  THE  TOTAL  PREMIUM  RE- 
QUIRED FOR  AN  IUSURANCE  OF  $1000  TO  BE  PAID  UP  WHEN  THE  EMPLOYE 
ATTAINS  AGE  55.  AMERICAN  EXPERIENCE  TABLE  OF  MORTALITY,  3V2  PER 
CEttT  INTEREST. 

INSURANCE  FOR  $1000  TO  BE  PAID  UP  AT  AGE  55 

AGE  WHEN  TOTAL  ANNUAL 

INSURANCE                          ANNUAL  AMOUNTS  TO  BE  CONTRIBUTED  BY  AMOUNT  TO  BE 

is  TAKEN                               EMPLOYER                                     EMPLOYE  CONTRIBUTED 

20     $7.72                                     '     $7.72  $15.44 

21     7.95                                               7.95  15.98 

22     8.19                                               8.19  16.37 

23     8.44                                              8.44  16.88 

24     8.72                                               8.72  17.44 

25     9.02                                               9.02  18.03 

26     9.33                                               9.33  18.66 

27     9.67                                               9.67                  •  19.34 

28     10.04                                               10.04  20.08 

29     10.44                                             10.44  20.88 

30     10.87                                             10.87  21.74 

31     11.34                                             11.34  22.68 

32     11.85                                             11.85  23.70 

33     12.41                                             12.41  24.82 

34     13.02                                             13.02  26.01 

35     13.70                                           13.70  27.40 

36     14.45                                             14.45  28.89 

37     15.28                                           15.28  30.56 

38     16.21                                             16.21  32.42 

39     17.26                                             17.26  34.51 

40     18.45                                             18.45  36.89 

41     19.80                                             19.80  39.60 

42     21136                                            21.36  42.72 

43     23.19                                            23.19  46.37 

44     25.34                                            25.34  50.67 

45     27.91                                             27.91  55.81 

46     31.05                                             31.05  62.09 

47     34.96                                             34.96  69.92 

48     39.96                                            39.96  79.92 

49     46.65                                             46.65  93.30 

50     55.96                                             55.96  111.91 

51     69.87                                            69.87  139.74 

52     92.99                                            92.99  185.97 

53     139.10                                          139.10  278.19 

54 277.15                                          277.15  554.30 

Premium  for  Insurance  for  Any   Year  can  be   Determined  from 
Table  XVIII  or  XIX 

From  Table  XVIII  or  XIX  above,  the  amount  of  premium  to 
be  paid  for  life  insurance  during  any  year  can  be  determined  readily 
as  a  percentage  of  the  salary  of  the  employe  for  the  year.  To  illus- 
trate-how such  premium  may  be  obtained,  assume  that  an  employe 
enters  a  branch  of  the  service  at  age  26,  where  the  standard  age  of 


I 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  67 

retirement  is  60,  with  a  salary  of  $1200.  The  amount  of  insurance 
to  be  assumed  at  the  outset  in  such  case  will  therefore  be  one  and  one- 
fourth  times  the  amount  of  salary,  or  $1500.  By  reference  to  Table 
XVIII,  at  "age  when  insurance  is  taken,"  namely,  age  26,  the  amount 
to  be  paid  in  premium  for  each  $1000  of  insurance  is  found  to  be 
$17.41.  The  amount  to  be  paid  for  an  insurance  of  $1500  will  there- 
fore be  $25.62.  This  is  2.14  per  cent  of  the  salary  of  the  year,  namely, 
$1200.  Of  this  amount  one-half  is  to  be  paid  by  the -employer  and 
one-half  by  the  employe. 

Table  XVIII  or  XIX  May  be  Used  to  Determine  the  Amounts  of 
Premiums  to  be  Paid  when  the  Salary  Increases  as  the  Years 
of  Service  Increase 

To  show  how  the  premium. of  any  year  may  be  determined  as 
a  percentage  of  the  salary  of  the  year,  in  cases  where  the  salary  has 
increased  over  that  of  the  previous  year,  consider  the  following  illus- 
tration : 

Suppose  that  an  employe  enters  a  branch  of  the  service  at  age 
26  where  the  standard  age  of  retirement  is  60,  and  that  his  salary 
is  that  of  the  Chicago  Teachers'  Salary  Scale.  Then,  during  the  first 
year,  since  the  salary  is  $800  the  amount  of  insurance  will  be  one  and 
one-fourth  times  $800  or, $1000.  By  reference  to  Table  XVIII,  it 
is  seen  that  the  premium  is  $17.41.  This  is  2.14  per  cent  of  the  salary 
of  the  year,  or  $800. 

At  the  beginning  of  the  second  year,  there  is  an  increase  in  salary 
of  $50.  This  will  give  an  increase  in  insurance  of  one  and  one-fourth 
times  $50  or  $62.50.  By  reference  to  Table  XVIII,  the  premium  at 
age  27  is  seen  to  be  $17.97  per  $1000  of  insurance.  The  premium  for 
$62.50  of  insurance  will  therefore  be  $1.12.  The  total  premium  of 
the  year  will  therefore  be  $17.41  due  to  the  insurance  assumed  at  the 
beginning  of  the  preceding  year  plus  $1.12  due  to  the  insurance  as- 
sumed because  of  increase  in  salary,  or  $18.53  in  all.  This  is  2.18 
per  cent  of  the  salary  of  the  year,  namely,  $850. 

In  a  similar  manner  we  may  proceed  and  derive  the  percentage 
of  salary  required  as  combined  contributions  of  employer  and  employe 
during  all  the  years  of  service  until  the  employe  attains  the  standard 
age  of  retirement.  Such  percentages  are  given  in  Table  XX. 

Table  XXI  gives  the  percentages  required  for  an  insurance  of 
one  and  one-fourth  times  the  salary  when  the  salary  follows  the 
Municipal  Clerical  Service  Salary  Scale,  and  Table  XXII,  the  per- 
centages required  for  an  insurance  of  one  and  three-fourths  times 
the  salary  when  the  salary  follows  the  Policemen's  and  Firemen's 


68 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


Salary  Scale.     In  both  cases  the  insurance  is  paid  up  when  the  em- 
ploye attains  the  standard  age  of  retirement. 

TABLE  xx 

TABLE  SHOWING  THE  PREMIUM  REQUIRED  FOR  THE  INSURANCE 
STATED,  AS  A  PERCENTAGE  OF  THE  SALARY  FOR  THE  AGES  AT  ENTRANCE 
AS  GIVEN.  STANDARD  AGE  OF  RETIREMENT  60.  SALARY  THAT  OF  THE 
CHICAGO  TEACHERS  SALARY  SCALE. 

INSURANCE  TO  BE  PAID  UP  AT  AGE  OF  60 

PERCENTAGE  OF   SALARY  REQUIRED  AS 

PREMIUM   AT  AGE  AT   ENTRANCE 
AMOUNT  OF  INTO  SERVICE 

SALARY  INSURANCE  21  23  26  30  35 

..$  800  $1000.00  1.89         1.99         2.18         2.49         3.03 

..      850  1062.50  1.89         1.99         2.18         2.49         3.03 

..     900  1125.00  1.89         2.00         2.19         2.50         3.05 

..      950  1187.50  1.90         2.01         2.20         2.52         3.07 

..    1000  1250.00  1.91         2.02         2.21         2.54         3.10 

..    1050  1312.50  1.93         2.04         2.23         2.56         3.14 

...    1100  1375.00  1.94         2.05         2.25         2.59         3.18 

..    1150  1437.50  1.95         2.07         2.27         2.62         3.23 

..    1200  1500.00  1.98         2.09         2.30         2.65         3.28 

1575.00  2.00         2.12         2.33         2.70         3.36 

1725.00  2.05         2.18         2.41         2.80         3.52 

1875.00  2.10         2.24         2.48         2.90         3.68 


YEARS  OF 

SERVICE 

1st 

2d 

3d 

4th 

5th 

6th 

7th 

8th 

9th 
10th 
llth 


year, 
year, 
year, 
year, 
year, 
year, 
year, 
year, 
year. 


year 1260 

year 1380 

12th   year   and   after 1500 


TABLE   XXI 

TABLE  SHOWING  THE  PREMIUM  REQUIRED  FOR  THE  INSURANCE 
•STATED,  AS  A  PERCENTAGE  OF  THE  SALARY  FOR  THE  AGES  AT  ENTRANCE 
AS  GIVEN.  STANDARD  AGE  OF  RETIREMENT  60.  SALARY  THAT  OF  THE 
MUNICIPAL  CLERICAL  SERVICE  SALARY  SCALE. 


INSURANCE  TO  BE  PAID  UP 


YEARS  OF 
SERVICE 


SALARY 


1st  year $  960 

2d  year 1080 

3d  year 1200 

4th  year 1200 

5th  year 1320 

6th  year 1320 

7th  year 1320 

8th  year 1320 

9th  year 1320 

10th  year 1440 

llth  year 1440 

12th  year 1680 

13th  year   and   after 1740 


AMOUNT  OF 
INSURANCE 
$1200 

1350 

1500 

1500 

1650 

1650 

1650 

1650 

1650 

1800 

1800 

2100 

2175 


AT  AGE  OF  60 
PERCENTAGE 
PREMIUM 


21 

1.89 

.89 

.90 

.90 

.92 

.92 

.92 

.92 

.92 

.97 

1.97 

2.07 

2.09 


23 

1.99 

2.00 

2.01 

2.01 

2.03 

2.03 

2.03 

2.03 

2.03 

2.08 

2.08 

2.20 

2.23 


OF  SALARY  REQUIRED  AS 
AT  AGE  AT   ENTRANCE 
INTO  SERVICE 


26 
2.18 
2.18 
2.20 
2.20 
2.22 
2.22 
2.22 
2.22 
2.22 
2.29 
2.29 
2.44 
2.47 


30 
2.49 
2.50 
2.52 
2.52 
2.55 
2.55 
2.55 
2.55 
2.55 
2.64 
2.64 
2.84 
2.89 


35 
3.02 
3.04 
3.07 
3.07 
3.12 
3.12 
3.12 
3.12 
3.12 
3.27 
3.27 
3.60 
3.68 


TABLE  XXII 

TABLE  SHOWING  THE  PREMIUM  REQUIRED  FOR  THE  INSURANCE 
STATED,  AS  A  PERCENTAGE  OF  THE  SALARY  FOR  THE  AGES  AT  ENTRANCE 
AS  GIVEN.  STANDARD  AGE  OF  RETIREMENT  55.  SALARY  THAT  OF  THE 
POLICEMEN'S  AND  FIREMEN'S  SALARY  SCALE. 

INSURANCE   TO   BE   PAID   UP   AT   AGE   OF    55 


YEARS  OF  AMOUNT  OF 

SERVICE                                  SALARY  INSURANCE 

1st    year. $1260  $2205 

2d     year 1380  2415 

3d     year 1470  2573 

4th  year  and  after 1500  2625 


PERCENTAGE  OF  SALARY  REQUIRED  AS 

PREMIUM   AT  AGE  AT   ENTRANCE 

INTO  SERVICE 

21  23  26  28  30 

2.78  2.96  3.26         3.52         3.81 

2.79  2.97  3.27         3.53         3.82 

2.80  2.98  3.29         3.55         3.85 
2.80         3.00  3.30         3.55         3.85 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  69 

AMOUNTS  OF  WIDOW'S  ANNUITY 

The  Standard  Plan  provides  that  if  an  employe  dies  while  in  serv- 
ice before  attaining  the  Standard  Age  of  Retirement  from  causes 
other  than  injuries  received  while  in  the  performance  of  duty,  leaving 
a  widow,  then  the  widow  will  receive  an  annuity  computed  as  follows : 

The  amount  of  the  husband's  life  insurance  together  with  the 
amount  of  the  accumulations  from  his  own  contributions  for  old-age 
retirement  annuity  will  be  used  to  provide  the  annuity  except  that 
if  the  amount  of  annuity  thus  provided  would  exceed  20  per  cent  of 
the  salary  which  the  employe  was  receiving  at  the  time  of  his  death  if 
he  was  other  than  a  policeman  or  a  fireman,  or  25  per  cent  if  he  was  a 
policeman  or  a  fireman,  then  the  amount  of  annuity  is  to  be  an  amount 
equal  to  the  percentage  stated.  If  the  amount  thus  provided  is  not 
sufficient  to  yield  an  annuity  of  the  percentage  stated,  then  there  shall 
be  added  from  the  accumulations  of  the  contributions  of  the  employer 
for  old-age  retirement  annuity  of  the  employe,  if  the  amount  of 
accumulation  will  permit,  an  amount  so  that  the  annuity  will  be  of  the 
percentage  of  salary  stated. 

This  applies  to  women  five  years  younger  than  their  husbands. 
The  amount  of  annuity  will  be  greater  or  less  than  this  according  to 
whether  or  not  the  widow  was  older  or  younger  than  five  years  younger 
than  her  husband. 

Tables  XXIII,  XXIV,  and  XXV  below  show  the  amounts  of  an- 
nuity available  to  widows  who  were  five  years  younger  than  their 
husbands,  in  cases  where  the  husbands  entered  the  service  at  age  26 
and  died  at  the  ages  stated  in  the  tables. 

TABLE   XXIII 

TABLE  SHOWING  THE  AMOUNT  PROVIDED  FOR  ANNUITY  AND  THE 
AMOUNT  OF  ANNUITY  AVAILABLE  TO  WIDOW  WHOSE  HUSBAND  ENTERED 
THE  SERVICE  AT  AGE  26  AND  DIED  WHILE  IN  SERVICE  AT  THE  ATTAINED 
AGE  STATED  IN  THE  TABLE.  SALARY  OF  EMPLOYE  THAT  OF  THE  CHICAGO 
TEACHER'S  SALARY  SCALE.  STANDARD  AGE  OF  RETIREMENT  60.  WIDOW  5 
YEARS  YOUNGER  THAN  HER  HUSBAND. 

(1)  (2)  (3)  (4)  (5)  (6) 

AMOUNT  OF 
ACCUMULATION 
FOR  OLD- AGE  RE-  TOTAL  TO 

T1REMENT  ANNUITY  PROVIDE 

YEARS  IN             ATTAINED  AMOUNT  OF  AFTER  DISCOUNT  ANNUITY  AMOUNT  01 

SERVICE                   AGE             LIFE  INSURANCE  FOR  REFUND  COL.  3  +  CoL.  4     ANNUITY 

1     27  $1000.00  $     54.55  $1054.55  $56 

2     28                        1062.50  114.91  1177.41  63 

3     29                        1125.00  180.59  1305.59  70 

4     30                        1187.50  254.04  '1441.54  78 

5     31                        1250.00  334.86  1584.86  82 

6     32                        1312.50  423.69  1736.19  96 

7     33                        1375.00  521.20  1896.20  105 

8    34                       1437.50  628.15  2065.65  115 

9     35                        1500.00  745.38  2245.38  127 

10     36  1575.00  875.09  2450.09  139 

11     37  1725.00  1027.01  2752.01  159 


70 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


(1) 


YEARS  IN 
SERVICE 

12  ... 
13 

14  ... 

15  ... 

16  ... 

17  ... 

18  ... 
19 

20  ... 

21  ... 

22  ... 

23  ... 

24  ... 

25  ... 

26  ... 

27  ... 

28  ... 

29  ... 

30  ... 

31  ... 

32  ... 
33 

34  . 


(2) 


ATTAINED 

AGE 
....38 
....39 
....40 

41 

42 

43 

44 

45 

....46 
....47 
.,..48 

49 

....50 

51 

....52 
....53 

54 

55 

56 

57 

....58 

....59 

...60 


(3) 

(4) 

(5) 

(6) 

AMOUNT  OF 

ACCUMULATION 

FOR  OLD-  AGE  RE- 

TOTAL TO 

TIREMENT  ANNUITY 

PROVIDE 

AMOUNT  OF 

AFTER  DISCOUNT 

ANNUITY 

AMOUNT     or 

LIFE  INSURANCE 

FOR  REFUND 

COL.  3+  COL.  4 

ANNUITY 

$1875.00 

$1203.63 

$3078.63 

$178 

1875.00 

1387.31 

3262.31 

191 

1875.00 

1578.33 

3453.33 

204 

1875.00 

1776.99 

3651.99 

218 

1875.00 

1983.61, 

3858.61 

234 

1875.00 

2198.48 

4073.48 

249 

1875.00 

2421.95 

4296.95 

267 

1875.00 

2654.37   • 

4529.37 

285 

1875.00 

2896.08 

4771.08 

300 

1875.00 

3147.46 

5022.46 

300 

1875.00 

3408.89 

5283.89 

300 

1875.00 

3680.78 

5555.78 

300 

1875.00 

3963.55 

5838.55 

300 

1875.00 

4257.63 

6132.63 

300 

1875.00 

4427.84 

6302.84 

300 

1875.00 

4605.05 

6480.05 

300 

1875.00 

4789.25 

6664.25 

300 

1875.00 

4981.36 

6856.36 

300 

1875.00 

5180.61 

7055.61 

300 

1875.00 

5387.84 

7262.84 

300 

1875.00 

5603.36 

7478.36 

300 

1875.00 

5827.49 

7702.49 

300 

1875.00 

6060.59 

•     7935.59 

300 

TABLE  XXIV 

TABLE  SHOWING  THE  AMOUNT  PROVIDED  FOR  ANNUITY  AND  THE 
AMOUNT  OF  ANNUITY  AVAILABLE  TO  WIDOWS  WHOSE  HUSBANDS  ENTERED 
THE  SERVICE  AT  AGE  26  AND  DIED  WHILE  IN  SERVICE  AT  THE  ATTAINED 
AGE  IN  THE  TABLE.  SALARY  OF  EMPLOYE  THAT  OF  THE  MUNICIPAL 
CLERICAL  SERVICE  SALARY  SCALE.  STANDARD  AGE  OF  RETIREMENT  60. 
WIDOW  5  YEARS  YOUNGER  THAN  HER  HUSBAND. 


(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

AMOUNT  OF 

ACCUMULATION 

FOR  OLD-AGE  RE- 

TOTAL TO 

TIREMENT  ANNUITY 

PROVIDE 

YEARS  IN 

ATTAINED 

AMOUNT  OF 

AFTER  DISCOUNT 

ANNUITY 

AMOUNT     OF 

SERVICE 

AGE 

LIFE  INSURANCE 

FOR  REFUND 

COL.  3+  COL.  4 

ANNUITY 

1     

.  .27 

$1200.00 

$     65.46 

$1265.46 

$  73 

2    

28 

1350.00 

142.16 

1492.16 

80 

3     , 

,  29 

1500.00 

231.22 

1731.22 

93 

4     

30 

1500.00 

323.85 

1823.85 

99 

5     

31 

1650.00 

430.90 

2080.90 

114 

6     

32 

1650.00 

542.22 

2192.22 

121 

7    

...33 

1650.00 

658.00 

2308.00 

128 

8    

34 

1650.00 

778.41       . 

2428.41 

136 

9 

35 

1650.00 

903.64 

2553.64 

144 

10 

,  36 

1800.00 

1049.46 

2849.46 

162 

11    , 

37 

1800.00 

1201.13 

3001.13 

172 

12     

38 

2100.00 

1396.10 

3496.10 

203 

13     

39 

2175.00 

1609.14 

3784.14 

221 

14     

,.:  40 

2175.00 

1830.71 

4005.71 

237 

15     

,  41 

2175.00 

2061.07 

4236.07 

253 

16     

42 

2175.00 

2300.72 

4475.72 

271 

17     

43 

2175.00 

2549.95 

4724.95 

290 

18    

44 

2175.00 

2809.15 

4984.15 

309 

19    

..45 

2175.00 

3078.72 

5253.72 

331 

20     ,,      , 

46 

2175.00 

3359.07 

5553.72 

343 

21 

47 

2175.00 

3650.62 

5825.63 

343 

22     

48 

2175.00 

3953.86 

6128.86 

343 

23     

49 

2175.00 

4269.21 

6444.21 

343 

24     

..50 

2175.00 

4597.18 

6772.18 

343 

25 

,  51 

2175.00 

4938.27 

7113.27 

343 

26     

,  52 

2175.00 

5135.80 

7310.80 

343 

27     

53 

2175.00 

5341.23 

-     7516.23 

343 

28     

54 

2175.00 

5554.88 

7729.88 

343 

29 

55 

2175.00 

5777.07 

7952.07 

343 

30     

56 

2175.00 

6008.15 

8183.15 

343 

31     

57 

2175.00 

6248.48 

8423.48 

343 

32     

58 

2175.00 

6498.42 

8673.42 

343 

33     

59 

2175.00 

6758.35 

8933.35 

343 

34     

60 

2175.00 

7028.69 

9203.69 

343 

ILLIXOIS  PENSION  LAWS  COMMISSION,   1918-1919 


71 


TABLE    XXV 

TABLE  SHOWING  Till'  AMOUNT  PROVIDED  FOR  ANNUITY  AND  THE 
AMOUNT  OF  ANNUITY  AVAILABLE  TO  WIDOWS  WHOSE  HUSBANDS  ENTERED 
THE  SKRYICK  AT  AGE  26  VND  DIED  WHILE  IN  SERVICE  AT  THE  ATTAINED 
\<ii:  STATED  IX  THE  TABLE.  SALARY  OF  EMPLOYE  THAT  OF  THE  POLICE- 
ME.VS  AND  I-IKEMEN'S  SALARY  SCALE.  STANDARD  AGE  OF  RETIREMENT 
5  YEARS  YOUNGER  THAN  HER  HUSBAND. 


55.     WIDOW 
(1) 


(2) 


YEARS  IN 

ATTAINED 

SERVICE 

AGE 

1  . 

27 

9 

28 

3  

29 

4  

30 

5  

31 

6  

32 

7  

33 

8  

34 

9  

35 

10  

36 

11  

37 

12  

38 

13  ..... 

39 

14  

40 

15  

41 

16  

42 

17  

43 

18  

44 

19  

45 

20  

46 

21  

47 

22  

48 

23  

49 

24  

50 

25  

51 

26  

52 

27  

53 

28  

54 

29  

55 

(3) 

(4) 

AMOUNT  OF 

ACCUMULATION 

FOR  OLD-AGE  RE-. 

TIREMENT  ANNUITY 

A  MO  I'  NT  OF 

AFTE.H  DISCOUNT 

LIFE  INSURANCE 

FOR   REFUND 

$2205.00 

$   152.20 

2415.00 

325.96 

2573.00 

518.86 

2625.00 

723.96 

2625.00 

938.23 

2625.00 

1160.10 

2625.00 

1390.85 

2625.00 

1630.82 

2625.00 

1880.38 

2625.00 

2139.94 

2625.00 

2409.87 

2625.00 

2690.60 

2625.00 

2982.56 

2625.00 

3286.20 

2625.00 

3601.99 

2625.00 

3930.41 

2625.00 

4271.96 

2625.00 

4627.18 

2625.00 

4996.60 

2625.00 

5380.80 

2625.00 

5780.36 

2625.00 

6195.91 

2625.00 

6628.08 

2625.00 

7077.54 

2625.00 

7544.98- 

2625.00 

7840.94 

2625.00 

8154.58 

2625.00 

8480.76 

2625.00 

8820.00 

(5) 


(6) 


TOTAL  TO 

PROVIDE 

ANNUITY 

AMOUNT  OF 

COL.  3  +  COL.  4 

ANNUITY 

$2357.20 

$125 

2740.96 

147 

3091.86 

167 

3348.96 

182 

3563.23 

195 

3785.10 

208 

4015.85 

223 

4255.82 

238 

4505.38 

254 

4764.94 

271 

5034.87 

289 

5315.60 

308 

5607.56 

328 

5911.20 

350 

6226.99 

373 

6555.41 

375 

6896.96 

375 

7252.18 

375 

7621.60 

375 

8005.80 

375 

8405.36 

375 

8820.91 

375 

9253.08 

375 

9702.54 

375 

10169.98 

375 

•  10465.94 

375 

10779.58 

375 

11105.76 

375 

11445.00 

375 

SURVIVORSHIP  ANNUITIES 

The  Standard  Plan  provides  that  when  a  male  employe  attains  the 
standard  age  of  retirement,  or  when  he  enters  upon  annuity  if  he 
enters  upon  annuity  before  he  attains  the  standard  age  of  retirement, 
if  he  has  a  wife,  the  reserve  on  the  life  insurance  provided  for  him 
shall  be  used  to  provide  an  annuity  for  such  wife.  This  annuity  is 
to  begin  upon  death  of  the  husband  and  continue  during  her  entire 
after  life-time.  » 

Cost  of  Survivorship  Annuity 

The  cost  of  a  survivorship  annuity  when  the  wife  is  five  years 
younger  than  the  husband  is  in  the  neighborhood  of  $385  for  each  $100 
of  annuity  payable  to  wives,  for  all  ages  of  husbands  between  age  55 
and  age  60.  If  a  wife  is  younger  than  her  husband  by  less  than  five 
years  or  if  she  is  older  than  her  husband,  the  amount  of  survivorship 
annuity  purchasable  by  $385  is  greater  than  $100.  If  she  is  younger 
than  her  husband  by  more  than  five  years  it  is  less  than  $100. 


72  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Amounts  of  Survivorship  Annuities  Provided  by  the  Standard  Plan 

The  amount  of  survivorship  annuity  provided  in  the  Standard 
Plan  for  the  wife  of  an  employe  in  the  case  of  a  normal  difference  in 
ages  between  husband  and  wife — that  is,  when  the  wife  is  five  years 
younger  than  the  husband — is  found  as  follows : 

WHEN  THE  EMPLOYE  is  OTHER  THAN  A  POLICEMAN  OR  A  FIRE- 
MAN— The  reserve  on  an  insurance  of  $1000  under  the  proposed  plan 
of  insurance  at  age  60  is  $626.92.  Then  if  the  employe  has  a  salary 
of  $1500,  the  amount  of  insurance  provided  for  and  by  him  will  be 
one  and  one-fourth  times  $1500,  or  $1875,  and  the  amount  in  reserve 
on  this  amount  of  insurance,  at  age  60,  will  be  $1175.48.  This  amount 
divided  by  385,  which  is  the  amount  stated  in  the  preceding  paragraph 
as  the  cost  of  a  survivorship  annuity  of  $100,  gives  $305,  which  is, 
therefore,  the  amount  of  survivorship  annuity  payable  to  the  widow 
of  the  employe  where  the  final  salary  of  the  employe  is  $1500.  This 
is  approximately  20  per  cent  of  the  salary  of  the  employe. 

Similarly,  for  any  other  amount  of  final  salary,  the  amount  of 
survivorship  annuity  when  the  standard  age  of  retirement  is  60  will 
be  approximately  20  per  cent  of  the  salary  of  the  employe. 

WHEN  THE  EMPLOYE  is  A  POLICEMAN  OR  A  FIREMAN — In  this 
case  the  reserve  on  an  insurance  of  $1000  at  age  55  is  $566.15.  Then 
if  the  employe  has  a  salary  of  $1500,  the  amount  of  insurance  carried 
for  and  by  him  will  be  one  and  three-fourths  times  $1500,  or  $2625, 
and  the  amount  in  reserve  on  this  amount  of  insurance  will  be  $1486.14. 
This  amount  divided  by  385  gives  $386,  which  is,  therefore,  the  amount 
of  survivorship  annuity  payable  to  the  widow  of  the  employe  where 
the  final  salary  of  the  employe  is  $1500.  This  is  approximately  25 
per  cent  of  the  salary  of  the  employe. 

Similarly,  for  any  other  amount  of  final  salary,  the  amount  of 
survivorship  annuity  when  the  standard  age  of  retirement  is  55  will 
be  approximately  25  per  cent  of  the  salary  of  the  employe. 

STANDARD   PLAN   AS    IT   RELATES    TO    PRESENT   EM- 
PLOYES 

The  above  provisions  of  this  chapter  refer  only  to  those  who  enter 
the  service  after  the  Standard  Plan  takes  effect.  The  provisions  re- 
lating to  those  in  service  at  the  time  the  Standard  Plan  takes  effect  are 
given  below.  It  will  be  seen  that  they  are  substantially  the  same  as 
those  outlined  above  except  for  modifications  due  to  inadequate  con- 
tributions in  the  past  as  compared  with  those  required  under  this  plan. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  73 

Part  of  Old  Age  Retirement  Annuity  Provided  by  the  Employer 

Under  the  Standard  Plan,  the  number  of  years  of  service  of  the 
employe  before  he  came  under  the  provisions  of  the  plan  would  first 
be  determined.  This  would  include  all  service  rendered  after  the  em- 
ploye attained  the  standard  age  of  retirement  in  cases  where  an  em- 
ploye is  over  the  standard  age  of  retirement  when  he  comes  under 
the  provisions  of  the  plan.  It  would  also  include,  in  cases  where  the 
employe  is  under  an  existing  pension  plan,  all  years  of  service  for 
which  credit  is  given  under  the  existing  plan. 

The  amount  would  then  be  determined  which  would  be  to  the 
credit  of  the  employe  as  an  accumulation  from  contributions  of  the 
employer  at  the  time  when  the  employe  comes  under  the  provisions 
of  the  Standard  Plan,  if  he  had  rendered  under  this  plan  the  number 
of  years  of  service  as  determined  in  the  preceding  paragraph,  and  his 
salary  during  his  entire  period  of  prior  service  had  been  the  same  as 
it  is  at  the  time  when  he  comes  under  the  provisions  of  this  plan. 

For  instance,  if  an  employe  now  age  28  in  a  service  where  the 
standard  age  of  retirement  is  60,  was  in  service  for  2  years,  and  his 
salary  at  the  time  when  he  came  under  the  provisions  of  this  plan  is 
$1000  the  employer  would  contribute  4.56  per  cent  of  salary  (See 
Table  I  or  II)  per  year  for  two  years  with  interest  accumulations  at 
4  per  cent  compound  interest.  This  would  amount  to  $45.60  per  year 
with  interest  accumulations  also  to  be  added.  Or,  again,  suppose 
that  an  employe  is  now  aged  65  in  a  service  where  the  standard  age 
of  retirement  is  60  and  was  in  service  for  a  period  of  20  years  and 
his  salary  at  the  time  when  he  came  under  the  provisions  of  this  plan 
is  $1000,  then  the  employer  would  contribute  subject  to  the  limitation 
in  contributions  of  8  per  cent  as  if  the  employe  entered  the  service  at 
age  45.  This  percentage  by  reference  to  Table  IV  is  seen  to  be  in 
excess  of  the  8  per  cent  limitation.  The  employer  would  therefore 
contribute  an  amount  equal  to  8  per  cent  of  $1000  per  year  for  20 
years  with  interest  accumulations,  and  the  amount  thus  determined 
would  be  used  as  the  basis  on  which  the  amount  of  annuity  which  the 
employe  would  receive  from  contributions  of  the  employer  would  be 
determined. 

If  the  employe  be  under  the  standard  age  of  retirement  at  the 
time  when  he  comes  under  the  provisions  of  this,  plan,  the  employer 
will  contribute  the  percentage  of  salary  necessary  so  that  the  accumu- 
lation, when  taken  with  the  accumulation  to  the  credit  of  the  employe 
from  contributions  of  the  employer  at  that  time,  will  be  sufficient  when 
the  employe  reaches  the  standard  age  of  retirement  to  provide  an 


74  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

annuity  of  two-thirds  of  40  per  cent  of  salary  if  the  employe  be  other 
than  a  policeman  or  a  fireman,  or  three-fourths  of  50  per  cent  of  salary 
if  the  employe  be  a  policeman  or  a  fireman.  The  contributions  of 
the  employer,  however,  shall  be  subject  to  the  same  limitation  in  con- 
tributions as  was  imposed  in  the  case  of  future  entrants. 

Under  this  plan,  the  part  of  the  annuity  of  a  present  employe  de- 
rived from  contributions  of  the  employer  will  be  as  great  in  all  cases 
as  that  which  a  future  entrant  of  like  salary  and  like  age  at  entrance 
into  service  would  receive  from  contributions  of  the  employer.  In 
the  cases  of  a  few  present  employes  who  entered  the  service  late  in 
life  and  are  over  the  standard  age  of  retirement  when  they  come  under 
the  provisions  of  the  plan,  the  annuity  would  be  somewhat  larger  than 
that  which  a  future  entrant  under  like  conditions  would  receive.  This 
is  due  to  the  fact  that  in  the  case  of  a  present  employe,  service  rendered 
after  attainment  of  the  standard  age  of  retirement  counts  in  computing 
the  period  of  service,  whereas  in  the  case  of  a  future  entrant  such 
service  is  not  counted. 

Part  of  Old  Age  Retirement  Annuity  Provided  by  the  Employe 

If  an  employe  prior  to  his  coming  under  the  provisions  of  the 
Standard  Plan  was  a  contributor  to  a  pension  system  which  the  pro- 
posed system  supersedes,  he  receives  credit  for  all  the  contributions 
made  to  the  superseded  system  with  4  per  cent  interest  compounded 
to  the  date  when  he  comes  under  the  new  system. 

Beginning  at  the  time  when  he  comes  under  the  new  system,  he 
will  then  contribute  such  a  percentage  of  salary  as  will  accumulate  to 
an  amount  which  when  taken  with  the  accumulation  .to  his  credit  when 
he  comes  under  the  system  will  be  sufficient  to  provide  an  annuity  of 
one-third  of  40  per  cent  of  salary  if  he  be  other  than  a  policeman  or 
a  fireman  or  one-fourth  of  50  per  cent  of  salary  if  he  be  a  policeman 
or  a  fireman.  The  percentage  of  salary  to  be  contributed  during  any 
year,  however,  is  not  to  exceed  4  per  cent. 

Under  these  provisions,  an  employe  who  has  contributed  little  to 
a  superseded  system  will  contribute  under  the  Standard  Plan  prac- 
tically the  same  percentage  of  salary  that  he  would  contribute  if  he 
were  entering  the  service  at  the  time  he  comes  under  the  provisions  of 
the  plan.  These  percentages  are  stated  in  Tables  I,  II,  III,  IV  and  V. 
From  these  tables  we  see  that  if  an  employe  other  than  a  policeman 
or  a  fireman  is  under  age  38,  or  a  policeman  or  a  fireman  is  under 
age  32,  at  the  time  when  he  comes  under  the  provisions  of  the  Standard 
Plan,  even  if  he  has  not  contributed  to  a  superseded  system,  he  may 
still  make  contributions  sufficient  before  reaching  the  standard  age 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  75 

of  retirement  to  provide  the  part  of  the  annuity  called  for  from  his 
own  contributions. 

If  an  employe  has  been  a  contributor  to  a  superseded  system  then 
the  age  at  which  the  limitation  of  4  per  cent  of  salary  will  operate  to 
reduce  the  amount  of  accumulation  which  would  otherwise  be  to  his 
credit  when  he  reaches  the  standard  age  of  retirement,  will  be  increased 
beyond  ages  38  and  32  respectively. 

Nevertheless,  where  the  older  employes  are  concerned  some  have 
already  passed  the  standard  age  of  retirement  while  others  are  so  near 
that  age  that  there  will  not  be  enough  time  before  reaching  that  age 
in  which  an  accumulation  of  an  amount  sufficient  to  provide  the  nor- 
mal annuity  can  be  made.  The  Standard  Plan  provides  that  in  such 
cases,  the  employe,  if  he  remains  in  service,  is  to  continue  contributions 
until  he  has  contributed  sufficient  funds  to  provide  the  normal  annuity. 

Notwithstanding  the  above  provisions  for  present  employes,  per- 
haps all  of  the  older  employes  in  the  police  and  fire  services,  and  some 
of  the  older  employes  in  some  of  the  other  services,  could  not  receive, 
under  these  provisions,  the  annuity  provided  under  the  system  to  which 
they  were  formerly  contributors.  To  meet  this  situation  the  Standard 
Plan  contains  the  provision  that  a  present  employe  who  was  a  con- 
tributor to  a  pension  system  which  the  proposed  system  would  super- 
sede and  has  attained,  or  shall  have  attained,  at  least  the  minimum 
age  of  retirement  while  in  service,  shall  be  entitled  to  an  annuity  of 
one  or  other  of  the  following  amounts,  whichever  is  the  greater: 

1.  An  annuity  of  the  amount  provided  under  the  Standard  Plan. 

2.  An  annuity  equal  in  amount  to  the  pension  that  was  promised 
in  the  superseded  system  to  which  the  employe  was  a  contributor,  to 
an  employe  of  the  salary,  rank  or  position  which  the  employe  holds  at 
the  time  when  the  Standard  Plan  goes  into  effect. 

The  payment  of  the  annuity  stated  in  the  second  case, -however, 
is  subject  to  the  provisions  that  the  employe  must  have  satisfied  all 
the  requirements  for  pension  that  Were  contained  in  the  superseded 
act,  and  that  if  he  has  a  wife  who  would  have  been  entitled  to  a  pension 
under  the  superseded  act,  if  the  act  had  remained  in  force,  then  he 
must  continue  his  own  contributions  for  life  insurance  and  assume 
those  of  the  employer  on  his  behalf  until  he  attains  the  standard  age 
of  retirement. 

Part  of  Life  Insurance  Provided  by  the  Employer 

Under  the  Standard  Plan,  the  employer  would  assume  one-half  of 
the  amount  of  life  insurance  provided  for  an  employe  who  is  entering 
the  service.  That  is,  if  the  employe  had  entered  the  service  at  an 


76  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1910 

age  sufficiently  early  that  the  maximum  amount  of  life  insurance 
would  have  been  available  for  him,  had  the  plan  been  in  effect,  then 
the  employer  will  provide  for  the  employe  an  insurance  of  an  amount 
equal  to  one-half  of  one  and  one-quarter  years'  salary  if  he  be  other 
than  a  policeman  or  a  fireman,  or  one-half  of  one  and  three-quarter 
years'  salary  if  he  be  a  policeman  or  a  fireman. 

Under  this  provision  a  present  employe  aged  40  or  under,  if  he 
be  other  than  a  policeman  or  a  fireman,  or  aged  31  or  under  if  he  be 
a  policeman  or  a  fireman,  when  he  entered  the  service,  will  be  insured 
by  the  employer  for  the  amount  just  stated.  If  he  was  older  than  the 
age  just  stated  when  he  entered  the  service,  then  the  amount  of  in- 
surance which  the  employer  will  assume  in  his  behalf  can  be  deter- 
mined readily  from  Table  XXVI  or  Table  XXVII. 

To  illustrate  how  the  amount  of  insurance  may  be  determined 
in  such  a  case,  consider  the  case  of  an  employe  who  entered  a  service 
at  age  50  where  the  standard  age  of  retirement  is  60,  and  the  salary  of 
the  employe  is  $1500.  From  Table  XXVI  we  see  that  2  per  cent  of 
a  salary  of  $1000,  or  $20.00,  will  provide  an  insurance- of  $316.  Then 
2  per  cent  of  a  salary  of  $1500,  or  $30.00,  will  provide  an  insurance 
of  thirty-twentieths  of  $316,  or  $474. 

TABLE  XXVI 

TABLE  SHOWING  THE  AMOUNT  OF  INSURANCE  WHICH  THE  EMPLOYER 
WILL  ASSUME  FOR  THE  BENEFIT  OF  A  PRESENT  EMPLOYE  WHO  ENTERED 
THE  SERVICE  AT  THE  AGE  STATED  IN  THE  TABLE  AND  HAS  A  SALARY  OF 
$1000. 

STANDARD   AGE   OF   RETIREMENT    60 

AMOUNT  OF 
AGE  INSURANCE 

40  or  less $625      . 

41  616 

42  582 

43  550 

44  514 

45  480 

46  447 

47  414 

48  381 

49 349 

TABLE  XXVII 

TABLE  SHOWING  THE  AMOUNT  OF  INSURANCE  WHICH  THE  EMPLOYER 
WILL  ASSUME  FOR  THE  BENEFIT  OF  A  PRESENT  EMPLOYE  WHO  ENTERED 
THE  SERVICE  AT  THE  AGE  STATED  IN  THE  TABLE  AND  HAS  A  SALARY  OF 
$1000. 

STANDARD  AGE  OF  RETIREMENT  55 


AGE 

50 

AMOUNT  OF 
INSURANCE 
$316 

51 

285 

52 

253 

53 

222 

54        

190 

55    

159 

56 

.  .    .   128 

57 

....     96 

58                       .... 

65 

59    . 

33 

AGE 

AMOUNT  OF 
INSURANCE 
$875 

AGE 

43 

AMOUNT 
INSURAI 
4.    ...$431 

32    .  . 

844 

44    

395 

33 

806 

45 

358 

34 

769 

46 

322 

35 

730 

47    

286 

36    

692 

48    

250 

37 

654 

49 

214 

38 

.  .   617 

50             , 

179 

39    

.    .    .              ...   579 

51    

143 

40 

542 

52 

108 

41 

505 

72 

42    . 

..   468 

54    . 

....     36 

ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  77 

Part  of  Life  Insurance  Provided  by  the  Employe 

The  amount  of  life  insurance  which  a  present  employe  can  carry 
under  the  provisions  of  the  Standard  Plan  can  be  determined  from 
Table  XXVI  or  XXVII  above  in  a  manner  exactly  similar  to  that  em- 
ployed in  determining  the  amount  of  life  insurance  which  the  em- 
ployer will  assume  on  behalf  of  the  employe,  except  that  the  age  in 
the  table  does  not  now  refer  to  the  age  when  the  employe  entered  the 
service  but  to  the  age  of  the  employe  when  he  comes  under  the  pro- 
visions of  the  Standard  Plan. 

Amounts  of  Widows*  Annuities 

The  amount  of  insurance  assumed  by  the  employer  together  with 
the  accumulation  to  the  credit  of  the  employe,  when  he  comes  under 
the  provisions  of  the  Standard  Plan,  from  contributions  assumed  by 
the  employer  for  the  old-age  retirement  annuity  of  the  employe, 
will  be  sufficient  to  provide  a  widow's  annuity  of  one-half  of  the 
amount  stated  in  Table  XXIII,  XXIV,  or  XXV  opposite  the  age  in 
the  table  that  corresponds  to  the  age  of  the  employe  when  he  comes 
under  the  provisions  of  the  plan.  This  amount  is  available  to  the  em- 
ploye from  contributions  of  the  employer  alone,  at  the  time  when  the 
employe  comes  under  the  provisions  of  the  Standard  Plan. 

To  this  amount  would  be  added  the  amount  of  annuity  which  the 
part  of  the  life  insurance  carried  by  the  employe  would  afford  and 
the  amount  of  annuity  which  any  accumulation  to  the  credit  of  the 
employe  due  to  his  contributions  to  a  superseded  system  would  provide. 

Amounts  of  Survivorship  Annuities 

The  amount  of  insurance  assumed  by  the  employer  will  be  suf- 
ficient to  provide  a  survivorship  annuity,  in  the  case  of  a  normal  rela- 
tive difference  in  age  between  an  employe  and  his  wife,  of  10  per  cent 
of  the  salary  of  the  employe  if  he  be  other  than  a  policeman  or  a  fire- 
man or  12^2  per  cent  if  he  be  a  policeman  or  a  fireman.  This  amount 
will  be  increased  by  the  amount  of  survivorship  annuity  that  can  be 
provided  by  the  insurance  carried  by  the  employe.  In  all  cases  there- 
fore except  those  of  the  older  employes,  the  amount  of  survivorship 
annuity  available  for  a  widow  would  be  the  same  as  that  provided 
for  the  widow  of  an  employe  who  entered  the  service  after  the  plan 
went  into  effect,  namely  20  per  cent  of  the  salary  of  the  employe  if 
he  be  other  than  a  policeman  or  a  fireman  or  25  per  cent  if  he  be  a 
policeman  or  a  fireman. 


78  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Further  Provisions  Affecting  Widows  of  Present  Employes 

The  Standard  Plan  provides  that  widows  of  employes  who  are 
at  present  under  a  pension  plan  that  contains  provisions  for  pensions 
to  widows,  shall  receive  the  pension  provided  under  such  present  act. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  79 


CHAPTER  V 


DISTINCTIVE  FEATURES  OF  STANDARD  PLAN 

FOR  A  COMPREHENSIVE  SYSTEM  OF 

PENSION  FUNDS 


The  modern  conception  of  a  Pension  System  rejects  the  idea  of 
gratuity ;  it  does  not  consider  the  pension  as  a  sum  that  is  taken  from 
one  class  of  citizens  and  given  to  another;  it  establishes  itself  upon 
the  conviction  that  a  pension  is  given  in  consideration  of  services. 

The  modern  Pension  or  Annuity  System  inevitably  adheres  to 
the  relationship  of  employer  to  employe.  In  establishing  such  Systems 
the  Government  seeks  to  improve  the  public  service  by  facilitating 
the  elimination  from  its  active  force  of  those  who  have  lost  their 
efficiency  because  of  advancing  age,  accident  or  sickness;  by  encour- 
aging the  retention  in  the  service  of  the  best  of  its  existing  employes, 
by  attracting  to  the  service  a  higher  grade  of  men ;  and  by  stimulating 
the  morale  of  its  employes.  The  System  is  to  be  justified  by  the  in- 
terests of  the  Government  as  an  employer.  It  would,  however,  appear 
to  be  as  well  an  advantage  to  the  general  public,  since  such  a  system 
tends  to  create  stability  of  employment,  and  independence  of  employes, 
and  reduce  the  need  for  public  and  private  charity.  It  is  extremely 
important  that  the  State  in  establishing  a  Pension  System  should  estab- 
lish it  upon  a  sound  and  equitable  basis,  one  fit  to  become  a  model  for 
private  Pensions  Systems. 

Pensions  Are  a  Part  of  Employe's  Compensation  for  Services 

In  theory,  all  these  Pension  Systems  are  supported  by  the  wage 
fund,  and  when  they  have  been  extended  so  as  to  include  all  employes, 
it  will  unquestionably  be  true  that  the  contribution  of  the  employer, 
as  well  as  that  of  the  employe,  will,  in  effect,  be  wages,  the  payment 
of  which  has  been  deferred.  The  current  salaries  then  paid  will  be 
adjusted  to  conform  with  the  pension  benefits  assured  and  the  entire 
Pension  System  will  be  recognized  as  containing  no  element  of  gra- 
tuity, but  as  being  supported  entirely  out  of  the  fund  for  wages.  It 
is  beyond  question  true  that  the  assurance  of  a  pension  is  reflected 
in  some  reduction  of  current  salaries.  When,  therefore,  a  Pension 
System  is  established,  which  affects  all  current  salaries,  the  opportunity 


80  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

to  participate  in  the  System  ought  to  be  given  to  all  public  employes, 
— as  a  matter  of  right. 

It  has,  however,  been  considered  impossible  to  extend  it  to  all 
employes.  All  scientific  Pension  Systems  must  be  based  upon  general 
mortality  averages.  The  average  person,  60  years  old,  will  live  14 
years,  but  individuals  will  vary  widely  from  this  average.  It  has  been 
regarded  as  essential  to  the  organization  of  a  pension  group  that  it 
should  contain  sufficient  members  to  make  their  life  experiences  con- 
form to  the  general  average.  If  a  Pension  System  were  established 
for  a  comparatively  small  group  and  the  first  pensioners  should  happen 
to  live  far  beyond  the  average  lifetime,  their  pensions  would  exceed 
the  available  contributions,  which  are  necessarily  based  upon  the  gen- 
eral average.  It  has  hence  been  considered  that  a  sound  Pension  Sys- 
tem requires  at  least  five  hundred  participants.  There  are  about 
55,000  public  employes  participating  in  Pension  Systems  in  Illinois; 
there  are  about  20,000  public  employes  for  whom  no  such  participation 
has  been  provided.  No  reason  for  this  distinction  exists  except  that 
generally  speaking  the  pensioned  employes  perform  their  work  in 
large  groups,  while  the  non-pensioned  employes  operate  in  small  or 
scattered  groups. 
System  Should  Be  Extended  to  All  Public  Employes 

Since  the  support  of  a  Pension  System  will  be  reflected  in  the 
general  wage  scale,  and  since,  therefore,  the  burden  falls  upon  all 
employes,  it  has  seemed  to  your  Commission  that  it  ought  to  devote 
a  great  deal  of  consideration  to  an  effort  to  extend  the  benefits  of  the 
Pension  System  to  all  public  employes,  instead  of  merely  to  some. 

One  of  the  distinctive  features  of  the  plan  presented  is  that  it 
offers  a  method  by  which  participation  in  pension  benefits  may  ultim- 
ately be  extended  to  all  public  employes  whose  tenure  of  office  is  such 
as  to  make  such  extension  desirable. 

The  Commission  has  also  been  impressed  with  the  varying  treat- 
ment extended  under  existing  Pension  Systems  to  those  who  die  in 
service  or  are  the  victims  of  sickness  or  accident.  It  has  appeared, 
in  examining  existing  laws,  that  the  provisions  made  for  protection  in 
the  case  of  death  and  physical  disability  have  been  even  less  judicious 
than  those  for  old-age  annuities. 

Plan  Provides  Protection  Against  Dependence  During  Productive 
Period 

A  Pension  System  primarily  provides  protection  against  depend- 
ence in  old  age.  It  has,  however,  seemed  equally  important  to  provide, 
so  far  as  possible,  against  dependence  during  the  productive  period  of 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  81 

life.  And  the  prevailing  attitude  of  the  American  people  with  respect 
to  insurance  has  convinced  your  Commission  that  the  average  public 
employe  is  quite  as  much  concerned  for  the  welfare  of  his  family  in 
case  of  his  death  or  disability  as  for  his  own  welfare  during  his  old 
age.  This  is  surely  a  sound  sentiment  and  one  to  be  noted  by  students 
of  Pension  Systems.  The  wages  of  all  are  affected  by  the  operation 
of  a  Pension  System; — therefore,  all  ought  to  have  the  opportunity 
to  participate  in  the  System.  And  those  who  have  borne  the  burdens, 
but  do  not  live  to  enjoy  the  benefits,  of  superannuation  annuities,  have 
surely  acquired  rights  that  must  be  considered.  Statistics  show  that 
out  of  100  men  entering  a  certain  employment  at  30  years  of  age,  ap- 
proximately 33  will  die  in  service  before  attaining  the  age  of  60.  About 
30  will  leave.  Only  about  37  will  live  and  remain  in  service  to  the  age  of 
retirement. 

Now,  it  has  never  been  the  intention,  in  establishing  a  Pension 
System,  to  inflict  an  injustice  upon  any  individual.  The  effort  has 
been  to  protect  him  against  known  hazards,  not  to  subject  him  to  new 
ones.  It  has  been  recognized  that  it  would  subject  an  employe  to  a 
new  hazard  if  he  were  to  be  forced  into  a  Pension  System  partly 
supported  at  his  own  expense,  none  of  the  benefits  of  which  could 
be  enjoyed  by  him  unless  he  lived  and  remained  in  the  same  employ- 
ment to  and  beyond  the  age  of  retirement. 

Haphazard  Benefit  Schemes  Would  Be  Replaced  by  Sound  Insur- 
ance 

Under  the  many  Systems  that  have  been  examined  there  has  been 
found  a  bewildering  variety  of  benefits  offered  on  account  of  em- 
ployes dying  in  the  service  or  leaving  the  service  because  of  disability, 
attesting  to  the  fundamental  conception  that  the  hazard  of  death  in 
employment  especially,  and  the  consequent  claim  of  the  decedent's 
family  for  relief,  cannot  escape  recognition.  These  benefits  expressed 
in  terms  of  "widows'  annuities,"  ''children's  pensions"  and  "sick  bene- 
fits," have  not  in  general  appeared  to  be  based  upon  any  sound  prin- 
ciple or  method.  Indeed,  the  problem  is  most  difficult.  But  it  has 
been  the  effort  of  the  Commission  to  suggest  as  a  substitute  for  the 
uncertain  and  haphazard  methods  that  characterize  some  of  the  exist- 
ing Pension  Systems  in  this  State,  a  more  definite  and  scientific  method 
of  providing  against  the  hazard  of  death,  in  particular,  and  to  inaugu- 
rate a  more  systematic  method  to  meet  the  hazard  of  disability.  To 
accomplish  this  it  has  seemed  to  be  necessary  to  avail  ourselves  of 
the  tried  and  sound  methods  of  legal  reserve  life  insurance  companies. 


82  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

We  have,  therefore,  incorporated  into  the  Pension  System  sub- 
mitted, a  complete  insurance  system,  and  we  believe  that  no  Pension 
System  can  be  considered  to  be  complete  and  satisfactory  that  does 
not  recognize  the  necessity  of  providing  insurance  protection,  as  well 
as  the  promise  of  an  annuity.  This  mortising  of  insurance  and  annui- 
ties is,  we  believe, -a  distinctive  feature  of  the  plan  we  submit.  So 
far  as  we  are  aware  no  definite  and  scientific  insurance  system  has  been 
consolidated  with  an  annuity  system  in  such  a  manner  as  to  create 
an  integral  whole,  while  at  the  same  time  each  part  is  kept  distinct 
from  the  other  in  the  matter  of  contributions  to  its  support  and  treat- 
ment of  the  equities  established  in  its  operation. 

Standard  Plan  Distinctive  in  Consolidating  Provisions  for  Three 
Hazards 

In  a  general  way,  therefore,  the  effort  to  provide  for  the  exten- 
sion to  all  public  employes  and  their  dependents  of  the  full  benefits 
of  protection  against  all  the  hazards  of  life,  has  resulted  in  certain 
features  in  the  plan  submitted  that  require  special  discussion  because 
they  are  peculiar  to  it.  We  believe  our  plan  to  be  unique  in  this,  that 
whereas  other  Systems  are  limited  in  their  application  to  large  groups 
of  employes,  we  have  endeavored  to  establish  this  plan  upon  such  a 
basis  as  to  make  it  open  eventually  to  all  employes;  and  whereas  all 
other  systems  have  provided  for  some,  and  some  of  such  Systems 
have  perhaps  provided  for  all,  of  the  hazards  of  life,  this  plan  not  only 
provides  for  all  of  the  hazards  of  life  for  employes,  but  provides  for 
some  according  to  approved  plans  for  accumulating  annuities  and  for 
others  according  to  approved  insurance  methods,  and  at  the  same  time 
consolidates  the  annuity  provisions  and  the  insurance  provisions  into  a 
single,  complete  arrd  workable  System. 

It  can  hardly  be  doubted  that  these  objects  will  be  considered 
desirable  in  a  State  where  public  sentiment  has  supported  so  generously 
the  modern  theories  of  pension  rights  and  obligations.  As  to  whether 
the  plan  recommended  by  the  Commission  actually  will  accomplish 
all  that  was  in  the  minds  of  the  Commissioners,  must  be  decided  by 
the  wisdom  of  the  legislature.  The  technical  description  of  the 
methods  adopted  would  perhaps  weary  most  readers,  and  the  purpose 
of  this  chapter  is  to  attempt  to  describe,  in  brief  and  simple  language, 
the  distinctive  salient  features  of  the  plan,  and  particularly  those 
designed  to  broaden  and  systematize  the  provisions  for  protection 
during  active  service,  and  to  extend,  in  the  interest  of  equity,  the 
opportunity  of  becoming  identified  with  the  general  Pension  System 
to  all  instead  of  to  a  part  only  of  the  public  employes. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  83 

Systems  Under  Fifteen  Present  Laws  Would  Be  Consolidated 

There  are  at  present  fifteen  laws  in  Illinois  providing  for  the 
establishment  of  Pension  Systems  for  groups  of  public  employes. 
These  Systems  differ  from  one  another  and  all  differ  from  the  pro- 
posed System.  The  problem  is  to  correlate  or  consolidate  these  Sys- 
tems into  a  combined  uniform  System  that  will  extend  to  all  public 
employes  equal  opportunities. 

The  general  purpose  of  these  laws  is  to  accumulate  and  admin- 
ister funds  to  provide  old  age  retirement  annuities,  disability  benefits 
and  widows'  and  children's  pensions.  Under  the  existing  laws  the 
employes  are  segregated  for  pension  purposes  into  thirty  or  more 
different  groups,  and  the  number  of  employes  in  these  groups  varies 
from  26,000  to  eight.  The  officials  of  various  cities  who  have  in 
disregard  of  the  law  failed  to  establish  a  Pension  System  with  but 
eight  or  ten  participants  are  not  to  be  reprobated  without  some  quali- 
fications, for  no  law  yet  drawn  in  this  State  could  be  applied  to  a 
group  so  small  without  inflicting  grave  injustice  and  resulting  in  ulti- 
mate disaster. 

It  is  obvious  that  for  each  group  there  must  be  a  Board  of  Man- 
agers, or  Trustees,  to  pass  upon  eligibility  to  pension  benefits,  to  col- 
lect, invest  and  disburse  the  funds,  and  in  general  to  administer  the 
law  pertaining  to  the  group.  Under  present  laws  these  Retirement 
Boards,  as  they  are  usually  called,  are  subject  in  some  cases  to  a 
limited  control  by  the  State  Insurance  Commissioner,  but  in  most  cases 
conduct  their  business  without  supervision.  So  far  as  the  law  con- 
trols these  Retirement  Boards,  they  have  in  general  certain  sources 
of  income  and  certain  obligations  to  meet.  They  are  held  to  no 
requirements  as  to  the  segregation  of  funds.  Except  in  particular 
cases,  they  are  not  held  to  rigid  requirements  in  the  matter  of  keeping 
of  accounts. 

It  has  been  found  in  practice  that  these  Retirement  Boards  per- 
form a  useful  function.  They  are* the  point  of  contact  between  the 
individual  and  the  System,  and  tend,  undoubtedly,  to  keep  active  a 
salutary  interest  on  the  part  of  the  employes  in  the  success  of  the 
System.  They  control  influences  that  prevent  malingering  to  secure 
sick  benefits,  and  they  also  are  in  a  position  to  secure  and  transmit 
valuable  information  as  to  the  general  effect  of  the  enforcement  of 
the  law. 

Approves  Having  Elected  Employes  the  Majority  on  Each  Retire- 
ment Board 

The  Commission  approves  the  custom  under  which  the  majority 
of  the  members  of  these  Retirement  Boards  are  chosen  from  among 


84  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

the  employes  and  pensioners.  Boards  thus  chosen  seem  well  qualified 
to  perform  such  services.  But  the  Commission  emphatically  declares 
that  systems  of  accounting  must  be  standardized  and  controlled,  and 
that  funds  must  be  segregated.  In  order  to  assure  this,  some  central 
Board  of  Control  must  be  established.  If  the  plan  submitted  be 
accepted  this  will  be  imperatively  necessary.  For  under  this  plan 
the  funds  on  hand  will  grow  to  large  dimensions  and  must  not  only 
be  accounted  for  under  approved  methods  and  segregated  as  specified 
in  the  law,  but  the  action  of  the  Retirement  Boards  must  be  subject 
to  supervision,  regulation  and  approval  in  many  very  important  par- 
ticulars. 

The  Commission  has,  therefore,  provided  in  the  plan  for  a  State 
Board  of  Control,  consisting  of  three  Trustees,  to  be  appointed  by  the 
Governor  and  to  be  vested  with  power  to  examine,  prescribe  methods 
for,  and  supervise  the  activities  of,  Retirement  Boards,  and  to  exercise 
general  control  over  the  fiscal  administration  of  the  respective  sys- 
tems. Notwithstanding  the  powers  vested  in  this  Central  Board,  and 
subject  to  it,  the  Commission  deems  it  wise  to  continue  the  Retire- 
ment Boards  in  the  respective  groups.  A  time  may  arrive  when  it  will 
be  possible,  if  deemed  expedient,  to  dispense  with  the  local  Retirement 
Boards. 

Central  State  Board  of  Control  to  Standardize  and  Supervise 

This  State  Board  of  Control  will  prescribe  methods  of  account- 
ing for  the  Retirement  Boards,  direct  the  general  policy  of  investments 
subject  to  the  limitations  fixed  in  the  law,  and  veto  objectionable  ones; 
exercise  the  power  of  visitation;  conduct  periodical  examinations; 
make  acutarial  investigations  to  determine  the  adequacy  of  the  con- 
tributions being  made ;  and  collect,  arrange  and  expound  to  the  Leg- 
islature, or  Governor  (when  requested)  the  information  and  recom- 
mendations relating  to  the  general  subject  of  pensions. 

These  purposes  alone  fully  justify  the  creation  of  a  Central 
Board  of  Control  of  the  entire  System.  But  it  appears  to  have  another 
and  equally  important  function,  namely,  to  administer  what,  for  want  of 
a  better  term,  we  shall  call  the  Equalization  Fund. 

How  the  Equalization  Fund  Would  Care  for  Variations 

To  describe  the  purpose  for  which  the  Commission  proposes  the 
establishment  of  this  fund  and  its  control  by  the  State  Board  of  Con- 
trol, we  may,  for  illustrative  purposes,  assume  that  for  all  those  who 
attain  the  age  of  60,  there  remains  upon  the  average  14  years  of  added 
life.  But  it  is  certain  that  some  will  live  less  and  some  more  than  14 
years.  Suppose  that  the  Retirement  Board  had 'accumulated  an  amount 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  85 

to  the  credit  of  an  individual  who  retires  at  the  age  of  60,  sufficient, 
with  interest,  to  make  14  annual  payments  of  a  stated  amount  as  a 
pension,  and  suppose  that  person  to  die  before  receiving  the  14  annual 
instalments,  then  under  the  plan  the  balance  in  the  fund  would  be  paid 
to  the  State  Board  of  Control  and  placed  in  the  Equalization  Fund. 

And,  upon  the  other  hand,  suppose  that  another  person,  entering 
upon  his  pension  at  the  age  of  60,  exhausts  the  fund  provided  to  pay 
him  14  annual  instalments  and  still  lives.  In  such  case  his  future 
payments  would  be  made  by  the  State  Board  of  Control  out  of  the 
Equalization  Fund.  In  the  absence  of  some  violent  disturbance  of 
the  law  of  averages  this  Equalization  Fund  should  always  be  supplied 
with  funds  sufficient  to  meet  the  demands  upon  it.  If  its  surplus  or 
deficit,  as  the  case  might  be,  becomes  abnormal,  new  actuarial  calcula- 
tions must  be  made  to  establish  the  basis  for  some  change  in  the  rates 
of  contribution. 

Would  Give  All  Benefit  of  Law  of  Averages 

This  simple  method  appears  to  bring  every  Pension  System,  large 
and  small,  into  the  enjoyment  of  the  law  of  mortality  averages,  and 
it  was  the  lack  of  this  feature  that  had  heretofore  made  it  appear 
impossible  to  extend  pension  privileges  to  small  groups  of  employes. 
The  difficulty  is  avoided,  however,  by  making  each  individual  group 
a  part  of  a  larger  group,  composed  of  all  employes,  thus  extending 
to  all  participation  in  the  law  of  mortality  averages. 

Applies  Law  of  Averages  to  Protection  Against  Hazard  of  Death 

There  remains  the  contingency  of  death,  which,  in  the  case  of 
an  individual  or  of  a  group,  is  surrounded  with  much  uncertainty, 
but  which  in  a  very  large  group  is  measured  under  the  law  of  averages 
with  surprising  accuracy.  No  one  knows  when  an  individual  will  die 
or  how  many  out  of  eight  given  individuals  will  die  during  any  year. 
But  with  respect  to  one  hundred  thousand  men  of  known  ages,  it  may 
be  predicted  with  practical  certainty  how  many  will  die  within  any 
fixed -number  of  years. 

It  has  appeared  to  the  Commission  that  the  Equalization  Fund  in 
the  control  of  the  State  Board  of  Control  provides  the  machinery 
for  distributing  among  all  the  employes  the  uncertainty  as  to  the  dura- 
tion of  life  in  individual  cases  and  establishing  the  certainty  that 
prevails  where  very  large  groups  are  considered.  And  this  brings 
us  to  a  consideration  of  the  insurance  features  of  the  proposed  plan. 

We  have  already  called  attention  to  the  fact  that  less  than  forty 
per  cent  of  those  entering  a  Pension  System  for  public  employes  live 


86  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

and  remain  in  the  service  to  enter  upon  the  enjoyment  of  old  age 
annuities. 

Justice  Requires  Protection  for  Those  Who  Leave  Service  Before 
Age  of  Retirement 

To  assure  to  the  remaining  sixty  per  cent  the  benefits  to  which 
they  are  justly  entitled,  has  been  a  matter  of  serious  consideration. 
All  have  contributed  to  the  System ;  and  in  so  far  as  the  System  does 
or  will  result  in  a  decrease  of  the  current  salary,  all  have  borne  its 
burdens.  It  is  obviously  necessary  to  treat  all  with  equity — those 
who  leave  as  well  as  those  who  remain  in  the  service.  And  this  the 
Commission  has  endeavored  to  do,  so  far  as  it  seemed  possible  without 
sacrificing  the  important  objects  of  clearing  the  public  service  of 
employes  rendered  inefficient  through  extreme  age  and  of  inducing  a 
reasonable  continuity  in  a  service  once  assumed. 

The  plan  observes  the  equities  in  returning  to  such  employes  as 
leave  the  service  all  the  cash  contributed  by  them,  through  deductions 
from  salaries,  for  the  support  of  the  annuity  features  of  the  System. 
Indeed,  it  has  so  carefully  guarded  this  matter  that  if  the  plan  is 
adopted  there  will  be  no  circumstance  or  condition  under  which  any 
employe,  or  his  heirs,  can_ever  fail  to  receive  the  full  amount  of  his 
own  contributions  with  interest.  And  the  Commission  has  included 
in  its  plans  an  arrangement  whereby  an  employe  who  retires,  after 
ten  years  of  service  but  before  attaining  the  minimum  age  of  retire- 
ment, is  credited  for  each  year  he  continues  in  service  beyond  the 
ten  years  with  one-tenth  of  the  accumulations  made  on  his  behalf  by 
the  employer  so  that  if  he  serves  twenty  years  in  all  before  retiring, 
he  is  credited  with  the  full  amount  of  his  own  and  the  employer's 
contributions.  The  total  of  these  accumulations  is  then  considered 
payable  to  him,  not  in .  cash,  but  in  monthly  payments,  beginning  at 
the  minimum  age  of  retirement,  and  if  the  amount  is  not  sufficient  to 
yield  him  at  least  fifteen  dollars  a  month  for  the  period  of  his  prob- 
able lifetime,  then  fifteen  dollars  a  month  is  to  be  paid  to  him  until 
the  accumulation  is  exhausted.  If  he  dies  before  the  amount  of  his 
own  contributions  with  interest  has  been  paid,  then  the  balance  is  paid 
to  his  estate. 

On  Widows'  Pensions  Present  Laws  Make  Unfair  Discrimination 

The  provision  for  those  who  die  in  service  must  obviously  be 
upon  a  different  basis.  Under  the  present  laws,  widows'  benefits  are 
allowed  under  the  Pension  Systems  established  for  policemen  and  fire- 
men, employes  of  the  House  of  Correction  and  school  employes,  em- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  87 

>•' 

bracing  less  than  8,000  out  of  55,000  total  members  of  Pension  Sys- 
tems in  the  State. 

There  appears  to  be  no  logical  basis  for  this  discrimination.  It 
cannot  be  said  that  these  widows'  benefits  are  extended  only  to 
so-called  hazardous  employments  solely  because  of  the  greater  hazards, 
for  they  are  paid  to  widows  of  those  who  die  from  any  cause  and  not 
merely  of  those  who  die  in  performance  of  duty.  Moreover,  it  has 
hardly  appeared  that  the  offering  of  widows'  pensions  to  the  com- 
paratively small  groups  enjoying  them,  was  done  with  a  full  apprecia- 
tion of  the  expense  of  maintaining  them,  and  doubtless  the  founders 
of  the  Policemen's  Pension  System  in  Illinois  would  be  surprised  to 
know  that  at  present  more  money  is  being  paid  annually  for  widows' 
benefits  than  to  retired  employes. 

The  necessity  of  determining  the  exact  cost  of  such  benefits  may 
not  be  avoided  without  inviting  disaster.  Moreover,  there  appears  no 
reason  why  such  benefits  should  not  be  offered  to  all,  and  especially 
if  extended  to  some.  The  Commission  in  its  proposed  plan  differen- 
tiates between  death  from  natural  causes  and  death  incurred  directly 
as  a  result  of  the  performance  of  duty  and  proposes  larger  benefits  in 
respect  of  the  latter.  It  knows  of  no  basis  for  differentiating  between 
employes  in  different  occupations.  All  bear  the  burdens  of  supporting 
the  System.  All  current  salaries  are  affected  alike.  Out  of  every 
one  hundred  men  who  enter  service  at  30  years  of  age,  thirty-three 
die  in  service  before  reaching  the  age  of  sixty.  We  have  referred 
before  to  the  anxiety  of  the  average  citizen  for  the  welfare  of  his 
family  after  his  death.  Undoubtedly,  this  concerns  him  more  than 
the  thought  of  his  own  welfare  after  retirement.  And  it  does  not 
seem  equitable  that  the  thirty-three  who  die  should  receive  nothing 
but  the  return  of  their  own  contributions  and  the  thirty-seven  who 
live  and  remain  in  service  until  the  age  of  retirement  should  receive 
such  disproportionate  advantages. 

Found  Practicable  and  More  Equitable  to  Offer  Life  Insurance  to 
All  Employes 

On  the  other  hand,  it  has  appeared  entirely  practicable  by  the 
use  of  the  well  tried  methods  of  legal  reserve  life  insurance  com- 
panies, to  offer  protection  against  death  in  service  to  all  participants 
in  all  Pension  Systems,  and  it  seems  necessary  to  do  so  in  order  to 
achieve  the  full  measure  of  benefits  of  a  Pension  System. 

In  preparing  to  do  this  the  starting  point  seemed  to  be  that  mod- 
ern practice  accepts  from  40  per  cent  to  50  per  .cent  of  salary  as  a 
suitable  pension  for  the  employe,  and,  roughly  speaking,  the.  widow's 


88  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

pension  is  usually  from  20  per  cent  to  25  per  cent  of  salary.  The 
accumulation  necessary  to  pay  an  annuity  of  from  20  per  cent  to  25  per 
cent  of  salary  as  a  survivorship  annuity  to  the  widow  of  a  deceased 
pensioner  is  the  amount  desired.  For  the  insurance  feature  of  a 
Pension  System  must  be  connected  with  the  widow's  annuity  and  it 
is  interesting  to  note  that  85  per  cent  of  the  men  who  live  and  remain 
in  service  to  the  age  of  60  are  married  men.  When  the  employe 
reaches  the  age  of  retirement,  the  contributions  to  provide  for  both 
annuity  and  insurance,  from  which  the  widow's  annuity  is  drawn,  are 
completed.  At  that  time  the  annuity  to  be  paid  to  his  widow  is  fixed 
upon  the  basis  of  his  probable  life  and  of  her  probable  length  of  life 
after  his  death.  The  amount  accumulated  for  insurance  is  computed 
to  be  that  necessary  to  provide  for  her  a  pension  equal  to  one-half 
the  pension  received  by  her  husband,  assuming  that  she  be  five  years 
the  younger.  It  is  particularly  to  be  noted  that  the  survivorship 
annuity  to  the  wife  is  fixed  at  the  date  of  her  husband's  retirement 
from  the  service. 

How   Survivorship   Annuity  to   Widow   of  Retiring   Employe  Is 
Provided 

If  payments  are  made  into  this  fund  such  as  would  be  made  for 
premiums  upon  an  insurance  policy  paid  up  at  date  of  retirement  in 
an  amount  equal  to  one  and  three-quarters  times  his  annual  salary, 
the  amount  accrued  would  be  sufficient,  in  the  case  of  an  employe 
retiring  at  age  55,  to  pay  as  a  survivorship  annuity  to  the  widow  five 
years  younger  than  himself,  an  amount  equal  approximately  to  half 
his  own  pension,  and  in  the  case  of  an  employe  retiring  at  age  60, 
the  basis  would  be  an  insurance  policy  equal  to  one  and  one-quarter 
times  his  annual  salary. 

And  upon  this  basis  there  has  been  built  up  an  insurance  system 
within  the  plan  submitted.  The  investigations  conducted  disclosed 
that  the  wife  of  a  retiring  employe  is,  upon  an  average,  five  years 
younger  than  the  husband.  If,  in  an  individual  case,  the  wife  were 
more  than  five  years  younger  than  the  husband,  the  pension  payable 
to  her  would  be  correspondingly  decreased ;  if  she  were  less  than  five 
years  younger  or  of  equal  or  greater  age  than  the  husband,  her  pension 
would  be  correspondingly  increased. 

The  considerations  that  determine  what  proportions  ought  to  be 
paid  directly  by  the  employe  and  what  by  the  employer  on  his  behalf 
are  not  the  same  as  those  that  prevail  with  respect  to  contributions 
toward  the  fund  for  superannuation  annuities. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  89 

One  to  One  Ratio  in  Contributions  for  Insurance 

It  has  seemed  to  the  Commission  that  there  are  benefits  accruing 
to  the  employer,  every  one  of  whose  employes  is  relieved,  to  some 
extent,  of  the  harassing  fears  of  disasters  which  his  family  might  suffer 
after  his  death.  But  the  greater  benefit  is  to  the  employe  himself, 
and  the  Commission  has  recommended  that  one-half  of  the  insurance 
premium  be  paid  by  the  employer  and  one-half  by  the  employe. 
Should  the  employe  die  in  active  service  before  retirement,  the  insur- 
ance is  paid  to  the  widow  or  children.  Should  he  withdraw  from  the 
service  before  the  age  of  retirement  he  may  continue  the  insurance 
but,  of  course,  must  pay  all  the  premiums  himself. 
Use  of  Equalization  Fund  for  Insurance 

The  detailed  description  of  the  provisions  by  which  these  simple 
results  are  attained  seems  complicated  in  the  extreme.  No  attempt 
will  be  made  here  to  explain  the  details  of  the  entire  System.  But  it 
will  be  apparent  at  once  that  because  some  die  immediately  after 
taking  insurance  and  some  live  for  many  years,  and  because  after 
reaching  the  age  of  retirement  some  live  longer  than  their  wives 
and  some  are  survived  many  years  by  their  wives,  that  such  an  insur- 
ance feature  could  never,  with  safety,  be  written  into  any  pension 
law  relating  to  a  small  group.  The  Equalization  Funds  of  the  State 
Board  of  Control  must  be  used  to  equalize  the  variations  of  individuals 
from  the  average  in  the  matter  of  insurance  disbursements  precisely 
as  in  the  annuity  disbursements.  In  cases  where,  from  whatsoever 
cause,  there  remains  a  balance  credited  to  an  individual  employe  after 
meeting  all  the  requirements  of  the  insurance  agreement,  and  the 
refund  requirements,  this  balance  must  be  paid  into  the  insurance 
Equalization  Fund ;  and  upon  the  other  hand,  where  there  is  any  defi- 
ciency in  the  funds  held  by  the  Retirement  Board  to  meet  the  obliga- 
tions of  this  nature  to  an  individual  employe,  this  deficiency  is  supplied 
by  the  State  Board  of  Control  out  of  its  Insurance  Equalization  Fund, 
so  that  for  insurance  purposes,  as  well  as  for  annuity  purposes,  every 
member  of  any  Pension  System  brought  under  the  operation  of  the 
Standard  Plan  submitted,  whether  a  member  of  a  large  group  or  of 
a  small  group,  is  as  well  protected  as  if  he  were  a  member  of  a  group 
equal  in  numbers  to  all  the  employes  in  the  State  under  the  standard 
pension  law. 

Small  Groups  Can  Come  in  Only  Under  a  Reserve  System 

This  general  discussion  will,  it  is  hoped,  make  it  clear  to  all  that 
there  is  no  insuperable  obstacle  to  the  entrance  into  the  enjoyment  of 
pension  privileges  by  small  groups  of  public  employes  as  well  as  large 
groups.  But  one  thing  remains  to  be  said — this  adjustment  can  be 


90  ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 

made   only  by  providing   that  the   entire   System   be  placed  upon  a 
Reserve  Basis. 

The  Report  of  the  Illinois  Pension  Laws  Commission  of  1916 
included  a  discussion  of  the  methods  of  providing  funds  for  paying 
pensions  and  stated  that  any  Retirement  System  might  be  operated 
either  upon  the  Cash  Disbursement  Basis,  or  upon  the  Actuarial 
Reserve  Basis.  Under  the  Cash  Disbursement  plan,  the  support  of 
the  Pension  System  is  provided  currently  as  payments  to  pensioners 
become  due.  No  funds  are  set  aside  to  accumulate  at  interest  and  the 
pension  burden  for  present  employes  is  unloaded  on  the  succeeding 
generation. 

Description  of  Reserve  Plan  Given  in  1*916  Report 

Under  the  Reserve  Plan,  the  cash  for  the  support  of  the  Pension 
System  is  provided  currently  as  the  obligation  is  accruing.  This  plan 
is  generally  known  and  was  referred  to  in  the  1916  Report  as  a  "get 
ready  for  the  future  plan."  That  report  on  Page  280  says:  "It 
involves  the  setting  aside  during  the  active  service  of  definite  amounts 
properly  calculated  to  provide  the  benefits.  The  amounts  so  set  aside 
are  accumulated  at  interest  and  form  a  reserve  fund  out  of  which 
pension  reserve  disbursements  are  made  as  they  fall  due.  The  Reserve 
Plan  recognizes  very  clearly  and  makes  it  understood  by  employer 
and  employe,  that  compensation  for  service  involves,  besides  current 
pay,  the  amount  that  should  be  set  aside  at  the  time  service  is  rendered 
to  provide  a  pension  for  the  employe  when  he  becomes  inefficient. 
Thus  each  generation  of  tax-payers  pays  its  own  obligation  for  service 
rendered.  Furthermore,  the  employe's  equity  in  the  scheme  is  well 
known  at  any  time  on  account  of  the  reserves  held  to  his  credit." 

Recommendations  for  Actuarial  Reserve  Plan  Are  Repeated  and 

Supplemented 

The  recommendations  of  the  1916  Commission  in  favor  of  the 
Actuarial  Reserve  Basis  are  renewed  and  emphasized  in  this  Report 
and  with  the  comment  to  be  added  that  with  the  Actuarial  Reserve 
Basis  in  operation,  it  is  possible  to  distribute  the  risks  over  the  entire 
body  of  employes  in  such  a  manner  as  to  make  it  possible  and  entirely 
practicable  to  admit  small  groups  of  employes  into  the  System  and 
that  this  would  be  impossible  if  the  Pension  System  in  this  State  is 
continued  under  the  Cash  Disbursement  Plan. 

Provision  Is  Made  for  Those  Who  Leave  the  Service  Before  Retire- 
ment Age 

We  have  heretofore  stated  that  out  of  100  employes  entering  the 
public  service  in  Illinois,  about  33  die  in  service  before  retirement  and 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  91 

about  37  live  and  continue  in  service  up  to  the  age  of  retirement  upon 
annuity.  We  have  briefly  described  the  treatment  both  would  receive 
through  insurance,  superannuation  annuities,  widows'  survivorship  an- 
nuities, etc.  There  remain*  about  30  out  of  the  hundred  who  leave 
the  service  before  reaching  the  age  of  retirement — of  these  some,  an 
unknown  number,  leave  to  accept  other  positions  and  some,  relatively 
a  small  but  not  a  definitely  known  number,  become  permanently  dis- 
abled through  sickness  or  accident.  And  we  have  described  the  treat- 
ment accorded  to  those  who  leave  in  health,  by  way  of  refund  privileges 
and  the  right  to  continue  insurance,  etc. 

For  those  who  leave  the  service  on  account  of  permanent  dis- 
ability the  plan  makes  ample  and  usual  provisions.  It  also  provides 
benefits  for  those  temporarily  disabled.  It  differentiates  between  those 
disabled  as  the  direct  result  of  performance  of  duty  and  those  whose 
disability  or  sickness  was  not  incurred  in  the  performance  of  duty, 
both  as  to  the  benefits  assured  and  as  to  the  distribution  of  the  burden 
of  providing  these  benefits.  As  for  the  detailed  discussion  of  this  and 
indeed  of  all  the  provisions  of  the  so-called  standard  plan,  the  reader 
must  refer  to  other  portions  of  this  Report.  We  mention  the  matter 
of  sickness  and  accident  benefits  here,  in  order  to  register  our  opinion 
that  they  belong  in  any  comprehensive  System  designed  to  provide 
against  the  general  hazards  of  life.  And  we  also  mention  them  in 
order  to  call  attention  to  the  fact  that  the  Commission  recommends 
that  the  funds  be  provided  to  take  care  of  these  disability  benefits  by 
current  contributions.  There  is  not  available  enough  information  as 
to  the  frequency  of  disability  to  enable  the  actuaries  to  determine  in 
advance  what  amounts  must  be  provided  to  meet  the  benefits  promised. 

It  is  believed  that  enough  information  is  available  to  know  ap- 
proximately what  the  cost  will  be  and  the  estimates  submitted  will,  it 
is  confidently  predicted,  be  verified  by  experience.  But  the  Commis- 
sion cannot  recommend  that  definite  accumulations  in  cash  payments 
made  currently  to  meet  deferred  claims  ought  to  be  required,  until 
there  is  certainty  as  to  the  exact  amount  needed. 

Disability  Provisions  Put  on  Cash  Disbursement  Basis 

It  is  perhaps  a  distinctive  feature  of  the  plan  submitted,  therefore, 
that  as  to  its  annuity  and  insurance  features  it  is  organized  upon  the 
Reserve  Basis  and  as  to  its  disability  features  upon  the  basis  of  Cash 
Disbursements.  Should  the  System  be  adopted  and  the  State  Board 
of  Control  direct  its  operation,  the  experience  of  the  future  will  furnish 
the  information  necessary  to  determine  the  exact  cost  of  maintaining 
these  disability  benefits.  When  this  exact  cost  is  determined,  the  dis- 


92  ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 

ability  benefits  could  be  accumulated  by  current  payments  in  cash  and 
the  whole  System  placed  upon  the  Reserve  Basis.  It  is  believed  that 
even  then  the  Retirement  Boards  will  continue  to  function  advan- 
tageously, but  a  System  could  be  operated  without  the  Retirement 
Boards  and  the  privilege  of  participating  in  pension  benefits  be  ex- 
tended to  all  public  employes  whose  tenure  of  office  is  such  as,  in 
the  judgment  of  the  legislature,  to  make  it  desirable  for  them  and  for 
the  public  service  and  conducive  to  the  general  welfare. 

It  will  be  observed  that  the  plan  contemplates  a  state-wide  pension 
system  for  all  public  employes,  making  provision  against  old  age,  dis- 
ability and  death.  This  Pension  System  will  constitute  an  institution 
of  no  mean  proportions,  whether  viewed  from  the  standpoint  of  the 
participants  in  the  System,  the  communities  involved  or  the  funds 
handled.  Its  very  size  will  enable  the  application  of  the  law  of  aver- 
ages to  public  employes  in  small  as  well  as  large  communities,  yet  will 
not  prevent  the  autonomous  development  of  the  various  local  units 
within  the  state-wide  groups.  Its  reserves,  accumulated  on  an  old 
line  life  insurance  basis,  will  be  so  large  as  to  render  it  extremely 
improbable  that  they  will  be  dissipated,  unwisely  invested  or  misapplied. 

The  System  will  attract  to  it  higher  administrative  ability.  It 
should  produce  both  efficiency  and  economy  and  create  for  itself  a 
position  in  the  business  and  financial  world  which  could  not  possibly 
be  achieved  by  isolated  units.  All  this  adds  to  the  security  of  the  par- 
ticipant. 

Standard  Plan  Has  Many  Advantages — Requires  Each  Generation 

to  Provide  for  Its  Own  Obligations  for  the  Future 
The  benefits  of  the  System  being  available  to  all  public  employes, 
the  temptation  on  the  part  of  one  group  (perhaps  more  ably  repre- 
sented before  the  Legislature)  to  procure  advantages  over  others  will 
cease  to  exist.  It  will  moreover  inculcate  both  in  public  officials  and 
public  employes  a  sense  of  responsibility,  a  feeling  that  the  establish- 
ment of  a  pension  involves  the  creation  of  an  obligation,  a  conviction 
that  the  present  generation  ought  not  to  attempt  to  saddle  debts  upon 
the  future  without  making  provision  for  their  payment.  In  short,  it 
will  substitute  for  a  body  of  pension  laws  adopted  at  haphazard  and 
without  system  or  correlation  a  State  institution  which,  by  methods 
analogous  to  those  of  a  soundly  conducted  insurance  company,  pro- 
vides indemnity  against  death,  old  age  and  disability. 


ILLINOIS  PENSION  LAV/S  COMMISSION,   1918  1919  93 


CHAPTER  VI 


COSTS  TO  EMPLOYERS  OF  ANNUITIES  AND 

OTHER  BENEFITS  INVOLVED  IN 

THE  STANDARD  PLAN 


In  this  Chapter  is  given  a  statement  of  costs  to  employers  of  an- 
nuities and  other  benefits  involved  in  the  Standard  Plan. 

The  results  in  all  cases  except  a  few  of  the  smaller  funds  were 
derived  from  statistics  compiled  by  the  Illinois  Pension  Laws  Com- 
mission of  1916. 

In  all  the  cases  of  the  larger  funds  except  the  State  Teachers' 
Pension  and  Retirement  Fund,  the  statistics  were  sufficiently  compre- 
hensive to  make  possible  a  comparatively  accurate  computation  as  to 
the  probable  costs  of  the  annuities  and  other  benefits  proposed. 

In  the  excepted  case,  owing  to  the  diversity  in  tenure  of  office  and 
the  short  time  during  which  the  fund  has  been  in  operation,  no  statistics 
at  all  comprehensive  regarding  withdrawal  from  service  were  avail- 
able. The  figures  in  the  case  of  this  fund  therefore  do  not  take  into 
account  refunds  to  employers  by  reason  of  employes  withdrawing  from 
the  teaching  service.  As  the  heavier  withdrawals  however  occur  during 
the  first  few  years  of  service  when  the  amounts  subject  to  refund  are 
small,  it  cannot  be  expected  that  the  figures  as  stated  would  be  ma- 
terially reduced  by  reason  of  such  refunds. 

In  a  few  of  the  smaller  groups  as  for  instance  the  state  wide  fire 
and  police  groups,  the  state  institutions  group  and  the  park  employes 
group,  the  figures  are  little  more  than  estimates  based  on  the  experience 
of  funds  of  groups  involving  similar  character  of  service,  in  which  the 
statistics  were  adequate.  It  is  believed,  however,  that  in  all  cases  the 
estimates  given  would  be  found  to  be  sufficiently  accurate  for  all  prac- 
tical purposes. 

In  the  table  given  below,  it  is  assumed  that  the  annual  payment 
stated  there  as  necessary  to  provide  supplementary  annuities  will  fully 
provide  for  such  annuities  in  a  period  of  40  years.  If  the  annual  pay- 
ments as  stated  there  should  prove  larger  than  the  actual  amounts  neces- 
sary to  provide  for  such  annuities,  this  liability  would  be  removed  in  a 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


shorter  period  than  40^years.     If  it  should  prove  smaller,  the  contri- 
bution period  would  necessarily  be  longer  than  40  years. 

TABLE    I 

TABLE  SHOWING  THE  CONTRIBUTIONS  REQUIRED  ANNUALLY  FROM 
EMPLOYERS  FOR  A  PERIOD  OF  40  YEARS  TO  PROVIDE  THE  AMOUNTS  NECES- 
SARY TO  PAY  THE  SUPPLEMENTARY  ANNUITIES  WHICH  WOULD  BE  PAID 
UNDER  THE  PROVISIONS  OF  THE  STANDARD  PLAN.  ALSO  THE  ANNUAL  PAY- 
MENTS REQUIRED  TO  PROVIDE  ANNUITIES,  OTHER  THAN  SUPPLEMENTARY 
ANNUITIES,  TO  PRESENT  EMPLOYES  AND  TO  PAY  ANNUITIES  TO  FUTURE 
ENTRANTS. 


fc 

s       g 

«  $J 

12     « 

a      £°* 

g  <^  W  ^; 

>•    £    a 

>«         W  H 

GROUP  OF  EMPLOYES 

1^  g6  w  2 

TOTAL 

J  o  w  «  a 

J  O  W   W  w 

<    OS   >J    £)    W 

t>Q-i  r  Z  ?! 
gHH  d,   g  w 

»^ES* 

, 

5  HC/3<P-i 

<, 

Igg5< 

$1  915  000 

$948  000 

$2  863  000 

Group     2. 

Policemen,  cities  5,000  to   1,000,000  inhabitants 

206,000 

109,000 

315,000 

Chicago    Firemen         

832,000 

408  000 

1  240  000 

Group     4. 

Firemen,   cities   3,000   to   1,000,000   inhabitants.  . 

200,000 

105,000 

305,000 

143  000 

73  000 

216  000 

535  000 

650  000 

1  185  000 

Group     7 

Cook   County  Employes              

107  000 

136,000 

243,000 

Group     8. 

Chicago    Public    School   Teachers  

625,000 

610,000 

1  235  000 

Group     9 

537  000 

650  000 

1  187  000 

250  000 

45  000 

295  000 

Group  11. 

Park   Employes,  other  than   Policemen  

260,000 

230,000 

490,000 

ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  95 


CHAPTER  VII 


THE  STANDARD  PLAN 


Section  1..    Definitions 

The  following  words  and  phrases  as  used  in  this  Act,  unless  a 
different  meaning  is  plainly  expressed  in  the  context,  shall  have  the 
following  meanings : 

"Annuity"  shall  mean  a  series  of  payments  stated  in  terms  of  the 
amount  payable  annually  but  payable  in  equal  monthly  installments 
each  of  one-twelfth  of  such  annual  amount,  the  first  being  payable  one 
month  after  the  event  for  which  annuity  is  payable  shall  occur. 

"Old  age  retirement  annuity"  shall  mean  an  annuity  granted  on 
account  of  service,  upon  or  after  attainment  of  a  specified  age,  payable 
during  the  entire  after  life  time  of  the  recipient. 

"Widow's  annuity"  shall  mean  an  annuity  payable  to  the  widow 
of  an  employe  or  former  employe,  determined  upon  death  of  the  em- 
ploye or  former  employe,  such  annuity  to  be  payable  during  her  en- 
tire after  life  time. 

"Widow's  survivorship  annuity"  shall  mean  an  annuity  to  be  paid 
to  the  wife  of  an  employe  or  former  employe,  determined  when  both 
husband  and  wife  are  alive,  the  first  installment  being  payable  one 
month  after  the  death  of  the  husband,  if  he  dies  while  in  service,  or 
one  month  after  the  last  monthly  payment  on  an  annuity  was  made  to 
the  husband,  if  he  dies  while  on  annuity,  and  payments  to  continue 
during  the  entire  after  life  time  oij  the  widow. 

"Disability  annuity"  shall  mean  an  annuity  payable  during  the 
disability  of  the  employe  for  a  period  specified. 

"Child's  annuity,"  shall  mean  an  annuity  payable  during  the  life 
of  a  child,  under  the  conditions  specified,  until  such  child  attains  the 
age  of  18  years. 

"Age"  shall  mean  age  at  nearest  birthda^. 

"Employer"  shall  mean  the  State  of  Illinois  or  any  county  or 
township  thereof,  or  any  board  of  park  commissioners,  or  any  city, 
village,  incorporated  town,  school  district  or  other  municipal  corpora- 
tion in  this  State  which  employs  persons  defined  as  employes  herein. 


96  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

"Reserve"  when  applied  to  an  annuity,  shall  mean  the  present 
value,  according  to  a  specified  table  of  mortality  and  rate  of  interest,  of 
the  payments  to  be  made  on  account  of  such  annuity. 

"Withdrawal  from  service"  shall  mean  separation  from  service 
as  an  employe  in  any  group  of  employes  as  classified  in  Section  3. 

"Salary"  or  "wages"  shall  mean  the  annual  compensation  received 
from  an  employer  for  services  rendered  the  employer,  except  that  any 
amount  of  compensation  in  excess  of  twenty-five  hundred  dollars  per 
year  shall  not  be  taken  into  consideration  in  determining  the  amounts  to 
be  deducted  from  the  salary  or  wages  of  an  employe  for  purposes  of 
this  Act  or  in  determining  the  amounts  of  annuities  to  be  paid  or  the 
insurances  to  be  provided  under  the  provisions  of  this  Act. 

"Highest  salary"  shall  mean  the  highest  salary  received  by  an 
employe  during  any  service  year  of  such  employe  before  such  em- 
ploye attains  the  standard  age  of  retirement. 

"Standard  age  of  retirement"  shall  mean  the  age  of  an  employe  on 
the  date  when  the  period  of  service  of  such  employe  is  measured  ex- 
actly in  full  years  nearest  to  the  date  when  the  employe  attains  the 
age  of  55  years,  if  he  be  a  policeman  or  a  fireman,  or  60  years,  if  he 
be  other  than  a  policeman  or  a  fireman. 

"Minimum  age  of  retirement"  shall  mean  an  age  five  years  less 
than  the  standard  age  of  retirement. 

"Service"  shall  mean  employment  by  any  employer  as  defined  in 
this  Act,  in  a  position  covered  by  this  Act. 

"Prior  service"  shall  mean  service  rendered  by  an  employe  before 
such  employe  comes  under  the  provisions  of  this  Act. 

"Former  employe"  shall  mean  an  employe  who  has  withdrawn 
from  service  and  has  not  entered  upon  annuity. 

"Future  entrant"  shall  mean  an  employe  who  enters  service  after 
January  1,  1920,  as  a  member  of  any  group  to  which  the  provisions  of 
this  Act  apply. 

"Present  employe  shall  mean  an  employe  who  is  in  service  on 
January  1,  1920,  as  a  member  of  a  group  to  which  the  provisions  of 
this  Act  apply. 

."Service  year"  shall  mean  one  year  counting  from  the  date  of  en- 
trance of  an  employe  into  service,  or  one  year  from  any  anniversary 
date  of  such  date  of  entrance. 

"Regular  interest"  shall  mean  interest  at  the  rate  of  four  per  cent 
per  annum. 

"Present  value"  of  an  amount  on  a  specified  date  as  of  some  prior 
date  shall  mean  the  sum  which,  when  improved  at  interest  at  a  specified 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  97 

rate  for  a  period  of  time  equal  to  the  period  between  the  dates  in  ques- 
tion, will  amount  to  the  sum  stated  on  such  specified  date. 

"Assumed  annual  salary"  shall  mean  three  hundred  times  the  salary 
or  wages  for  a  single  working  day,  of  an  employe  whose  salary  is  on 
other  than  an  annual  salary  basis. 

"Prior  annuitant"  shall  mean  anyone  on  pension  or  annuity  on 
January  1,  1920,  whose  pension  or  annuity  is  paid  from  any  pension 
fund  or  pension  and  retirement  fund  existing  under  and  by  virtue  of 
any  Act  which  this  Act  supersedes. 

"Beneficiary"  shall  be  any  pensioner,  annuitant,  contributor  to,  or 
participant  in,  any  pension  fund  or  pension  and  retirement  fund  created 
under  any  Act  or  Acts  which  this  Act  supersedes,  or  any  person  in- 
cluded in  any  group  under  the  jurisdiction  of  any  Retirement  Board 
created  under  this  Act. 

"Employe"  shall  mean  any  person  in  service  as  a  member  of  any 
group  as  defined  in  Section  3  of  this  Act. 

Section  2.     When  Employes  Shall  Come  Under  the  Provisions  of 
this  Act 

On  and  after  January  1,  1920,  all  future  entrants  and  all  present 
employes  as  described  in  this  Act  shall  come  under  the  provisions  of 
this  Act  as  follows : 

Future  entrants  on  the  date  of  entrance  into  service  and  present 
employes  on  the  day  "following  that  upon  which  the  period  of  service 
of  each  such  employe  is  measured  exactly  in  full  years. 

Section  3.    Groups  of  Employes 

For  the  purposes  of  this  Act,  public  employes  in  this  State  shall 
be  segregated  into  groups  as  follows : 

Group  1.  All  persons  who  are  or  who  shall  be  employed  by  any 
city  having  a  population  of  more  than  one  million  (1,000,000)  inhab- 
itants, who  are  appointed  and  sworn  as  regular  or  probationary  police- 
men, and  all  beneficiaries  (as  defined  by  this  Act)  of  any  police  pension 
fund  created  under  and  by  virtue  of  an  Act  entitled,  "An  Act  to  provide 
for  the  setting  apart,  formation  and  disbursement  of  a  Police  Pension 
Fund  in  cities  having  a  population  exceeding  two  hundred  thousand 
inhabitants,"  approved  June  29,  1915,  in  force  July  1,  1915,  as  sub- 
sequently amended. 

Group  2.  All  persons  who  are  or  who  shall  be  employed  by  any 
city,  village  or  incorporated  town  having  a  population  of  not  less  than 
five  thousand  (5,000)  and  not  more  than  one  million  (1,000,000)  in- 
habitants as  members  of  a  regularly  constituted  police  force  of  such 


98  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

city,  village  or  incorporated  town;  and  all  beneficiaries  (as  defined  in 
this  Act)  of  any  police  pension  fund  created  under  and  by  virtue  of  an 
Act  entitled,  "An  Act  to  provide  for  the  setting  apart,  formation  and 
disbursement  of  a  police  pension  fund  in  cities,  villages  and  incorpor- 
ated towns  of  not  less  than  5,000  and  not  more  than  100,000  inhabit- 
ants," approved  June  14,  1909,  in  force  July  1,  1909,  as  subsequently 
amended;  and  all  beneficiaries  (as  defined  in  this  Act)  of  any  police 
pension  fund  created  under  and  by  virtue  of  an  Act  entitled,  "An  Act 
to  provide  for  the  setting  apart,  formation  and  disbursement  of  a  police 
pension  fund  in  cities,  villages  and  incorporated  towns,"  approved  April 
29,  1887,  in  force  July  1,  1887,  as  subsequently  amended. 

Group  3.  All  persons  who  are  or  who  shall  be  employed  by  any 
city  having  a  population  of  more  than  one  million  (1,000,000)  inhab- 
itants, who  have  been  or  shall  be  appointed  to  positions  which  are 
classified  by  the  civil  service  commission  of  such  city  as  in  the  fire 
service  of  such  city;  and  all  beneficiaries  (as  defined  in  this  Act)  of 
any  firemen's  pension  fund  created  under  and  by  virtue  of  an  Act  en- 
titled, "An  Act  to  provide  for  a  firemen's  pension  fund  and  to  create 
a  board  of  trustees  to  administer  said  fund  in  cities  having  a  population 
exceeding  two  hundred  thousand  (200,000)  inhabitants,"  filed  June  14, 
1917,  in  force  July  1,  1917. 

Group  4.  All  persons  who  are  or  shall  be  employed  by  any  city, 
village  or  incorporated  town  having  a  population  of  not  less  than  five 
thousand  (5,000)  and  not  more  than  one  million  (1,000,000)  inhab- 
itants who  have  been  or  shall  be  appointed  to  positions  classified  by  the 
civil  service  commission  of  such  city,  provided  such  city  shall  have 
adopted  an  Act  entitled,  "An  Act  to  regulate  the  civil  service  of  cities," 
approved  and  in  force  March  20,  1895,  as  in  the  fire  service  of  such 
city ;  and  all  persons  who  are  or  who  shall  be  appointed  to  any  position 
in  the  paid  fire  department  of  any  such  city,  village  or  incorporated 
town  which  has  not  adopted  such  Act;  and  all  beneficiaries  (as  defined 
in  this  Act)  of  any  firemen's  pension  fund  created  under  and  by  virtue 
of  an  Act  entitled,  "  An  Act  to  revise  the  law  creating  a  firemen's  men- 
sion  fund  in  cities,  villages  and  incorporated  towns  with  a  population  of 
not  less  than  five  thousand  and  not  more  than  two  hundred  thousand 
inhabitants,"  filed  June  28,  1917,  in  force  July  1,  1917. 

Group  5.  All  persons  who  are  or  shall  be  employed  by  any  board 
of  park  commissioners  for  any  one  or  more  towns,  whether  said  towns 
have  heretofore  existed  or  now  exist  under  and  in  pursuance  of  any  Act 
or  Acts  of  the  General  Assembly  of  this  State,  and  appointed  and  sworn 
as  probationary  or  regular  policemen  in  any  police  force  or  police  de- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  99 

partment  established  by  such  board  of  park  commissioners;  and  all 
beneficiaries  (as  defined  in  this  Act)  of  any  park  police  pension  fund 
created  under  and  by  virtue  of  an  Act  entitled  "An  Act  to  provide  for 
the  setting  apart,  formation,  administration  and  disbursement  of  a  park 
police  pension  fund,"  filed  May  19,  1917,  in  force  July  1,  1917. 

Group  6.  All  persons,  except  policemen,  firemen,  and  temporary 
appointees,  who  are  or  who  shall  be'  employed  by  any  city  having  a 
population  of  more  than  one  million  inhabitants,  in  the  classified  civil 
service  of  such  city,  who  were  or  who  shall  be  appointed  to  their  po- 
sitions under  and  by  virtue  of  an  Act  entitled  "An  Act  to  regulate  the 
civil  service  of  cities,"  approved  and  in  force  March  20,  1895,  and  all 
persons  now  employed  in  the  classified  civil  service  of  such  city  who 
were  appointed  prior  to  the  passage  of  said  Act,  and  all  persons 
who  may  be  employed  in  the  classified  civil  service  of  such  city  under 
and  by  virtue  of  any  similar  subsequent  Act;  and  all  beneficiaries  (as 
defined  in  this  Act)  of  any  pension  fund  created  under  and  by  virtue  of 
an  Act  entitled,  "An  Act  to  provide  for  the  formation  and  disbursement 
of  a  pension  fund  in  cities,  villages  and  incorporated  towns  having 
a  population  exceeding  100,000  inhabitants  for  municipal  employes 
appointed  to  their  positions  under  and  by  virtue  of  an  Act  entitled, 
'An  Act  to  regulate  the  civil  service  of  cities/  approved  and  in  force 
March  20,  1895,  and  for  those  who  were  appointed  prior  to  the  pas- 
sage of  said  Act  and  who  are  now  in  the  service  of  such  city,  village 
or  town,"  approved  May  31,  1911,  in  force  July  1,  1911,  as  subsequently 
amended;  and  all  beneficiaries  (as  defined  in  this  Act)  of  any  pension 
fund  created  under  and  by  virtue  of  an  Act  entitled,  "An  Act  to  pro- 
vide for  the  formation  and  disbursement  of  a  public  school  employe's 
pension  fund  in  cities  having  a  population  exceeding  one  hundred 
thousand  inhabitants,"  approved  May  15,  1903,  in  force  July  1,  1903; 
and  all  beneficiaries  (as  defined  in  this  Act)  of  any  pension  fund  created 
under  and  by  virtue  of  an  Act  entitled,  "An  Act  to  provide  for  the  for- 
mation and  disbursement  of  a  public  library  employes'  pension  fund  in 
cities  having  a  population  exceeding  100,000  inhabitants,"  approved 
May  12,  1905,  in  force  July  1,  1905,  as  subsequently  amended;  and  all 
beneficiaries  (as  defined  in  this  Act)  of  any  pension  fund  created  under 
and  by  virtue  of  an  Act  entitled,  "An  Act  to  provide  for  the  setting 
apart,  formation  and  disbursement  of  a  house  of  correction  employes' 
pension  fund  in  cities  having  a  population  exceeding  150,000  inhab- 
itants," approved  June  10,  1911,  in  force  July  1,  1911,  as  subsequently 
amended. 


100  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Group  7.  All  persons  who  are  or  who  shall  be  employed,  in  the 
classified  civil  service,  by  any  county  of  this  State  having  a  population 
of  more  than  two  million  (2,000,000)  inhabitants,  who  were  or  who 
shall  be  appointed  to  their  positions  under  and  by  virtue  of  an  Act 
entitled,  "An  Act  to  revise  the  law  in  relation  to  counties/'  approved  and 
in  force  March  31,  1874,  as  subsequently  amended;  and  all  persons 
who  may  be  employed  in  the  classified  civil  service  of  such  county  under 
and  by  virtue  of  any  similar  subsequent  Act;  and  all  beneficiaries  (as 
defined  in  this  Act)  of  any  pension  fund  created  under  and  by  virtue 
of  an  Act  entitled,  "An  Act  to  provide  for  the  formation  and  disburse- 
ment of  a  pension  fund  in  counties  having  a  population  of  150,000  or 
more  inhabitants,  for  the  benefit  of  officers  and  employes  in  the  service 
of  such  counties,"  approved  June  29,  1915,  in  force  July  1,  1915. 

Group  8.  All  persons  who  are  or  who  shall  be  employed  to  teach 
in  the  public  schools  which  are  under  the  management  and  supervision 
of  a  board  of  education  in  cities  having  a  population  of  more  than  one 
million  (1,000,000)  inhabitants,  and  all  beneficiaries  (as  defined  in  this 
Act)  of  any  public  school  teachers'  pension  and  retirement  fund  created 
under  and  by  virtue  of  an  Act  entitled,  "An  Act  to  establish  and  main- 
tain a  system  of  free  schools,"  approved  and  in  force  June  12,  1909,  as 
subsequently  amended. 

Group  9.  All  persons  who  are  or  who  shall  be  employed  as  teach- 
ers, teacher  secretaries,  supervisors,  principals,  supervising  principals, 
superintendents  or  assistant  superintendents  in  any  public  school  or 
schools  in  this  State,  which  are  under  the  management  and  super- 
vision of  any  board  of  education,  school  board,  board  of  school  di- 
rectors, or  other  managing  or  governing  body  of  a  public  school  or 
schools,  except  those  under  the  management  ,of  a  board  of  education  in 
any  city  having  a  population  of  more  than  one  million  (1,000,000) 
inhabitants ;  and  all  beneficiaries  (as  defined  in  this  Act)  of  any  pension 
and  retirement  fund  created  under  and  by  virtue  of  an  Act  entitled,  "An 
Act  in  relation  to  an  Illinois  State  Teachers'  Pension  and  Retirement 
Fund,"  approved  May  27,  1915,  in  force  July  1,  1915,  as  subsequently 
amended;  and  all  beneficiaries  (as  defined  in  this  Act)  of  any  teachers' 
pension  and  retirement  fund  created  under  and  by  virtue  of  an  Act 
entitled,  "An  Act  to  enable  any  board  of  school  inspectors,  or  any  body 
or  board  of  officials,  which  governs,  or  has  charge  of  the  affairs  of 
any  school  district  having  a  population  of  not  fewer  than  10,000  and 
not  more  than  100,000  inhabitants,  and  governed  by  special  Acts  of 
the  General  Assembly  of  this  State  and  in  such  other  districts  as  may 
hereafter  be  ascertained  by  any  special  or  general  census  to  have  such 


ILLINOIS  PENSION  LAWS 


101 


population  and  which  school  districts  are  also  governed  by  like 
special  Acts,  to  establish  and  maintain  a  teachers'  pension  and  retire- 
ment fund,"  approved  June  27,  1913,  in  force  July  1,  1913,  as  subse- 
quently amended. 

Group  10.  All  persons  who  are  or  who  shall  be  employed  by  the 
State  of  Illinois,  in  any  State  educational,  correctional,  or  charitable 
institution  (excepting  the  University  of  Illinois)  supported  wholly  or 
in  part  by  public  moneys  of  this  State,  as  teachers,  teacher  clerks,  prin- 
cipals, supervising  principals,  presidents,  superintendents,  assistant  su- 
perintendents, librarians,  or  assistant  librarians,  who  give  at  least  half 
time  to  educational  work;  and  all  beneficiaries  (as  defined  in  this  Act) 
of  any  pension  and  retirement  fund  created  under  and  by  virtue  of 
an  Act  entitled,  "An  Act  to  create  and  administer  a  State  Institutions 
Teachers'  Pension  and  Retirement  Fund,"  filed  June  14,  1917,  in  force 
July  1,  1917. 

Group  11.  All  persons,  except  policemen  and  temporary  ap- 
pointees, who  are  or  shall  be  employed  by  any  board  of  park  com- 
missioners for  any  one  or  more  towns,  whether  said  towns  have  here- 
tofore existed  or  now  exist  under  and  in  pursuance  of  any  Act  or  Acts 
of  the  General  Assembly  of  this  State,  who  were  or  who  shall  be  ap- 
pointed to  their  positions  under  and  by  virtue  of  an  Act  entitled,  "An 
Act  relating  to  the  civil  service  in  park  systems,"  approved  June  10, 
1911,*  in  force  July  1,  1911,  as  subsequently  amended.  Also  all  persons, 
except  policemen  and  temporary  appointees,  who  are  or  who  may  be 
employed  by  any  such  board  of  park  commissioners  in  positions  exempt 
from  the  operation  of  the  said  Act  relating  to  civil  service  who  shall 
elect  to  come  under  the  provisions  of  this  Act  within  one  year  from 
the  date  when  it  shall  come  into  force  and  effect. 

Section  4.    Retirement  Boards 

For  each  group  of  employes  as  described  in  Section  3  hereof,  a 
Retirement  Board  of  five  members  is  hereby  created  to  administer  the 
affairs  of  such  group  for  the  purposes  of  this  Act. 

Each  such  Retirement  Board  shall  be  constituted  as  follows : 

(a)  Three  members  elected  by  the  group  of  employes  concerned 
and  the  annuitants  whose  annuities  are  payable  from  funds  which  shall 
be  administered  by  the  board,  two  of  whom  at  least  must  be  employes  in 
active  service  at  the  time  of  their  election,  under  such  rules  and  reg- 
ulations as  the  Retirement  Board  may  adopt. 

On  or  before  September  1,  1919,  the  Retirement  Commission  shall 
issue  a  call  for  the  election  of  the  elective  members  of  each  Retirement 


102  JU.l.^OIS   I»KIvS.!(-)\*LAWS  COMMISSION,  1918-1919 

Board  herein  provided  for,  which  election  shall  be  held  on  or  before 
the  third  Friday  in  September,  1919,  and  shall  designate  persons  to 
conduct  such  elections.  Such  persons,  in  any  of  the  groups  designated 
as  group  1,  group  3,  group  5,  group  6,  group  7,  group  8,  group  9,  and 
group  10,  in  Section  3  hereof  shall  be  the  elective  members  of  the 
board  or  boards  of  trustees  of  the  pension  fund  or  funds  or  pension  and 
retirement  fund  or  funds,  in  which  all  or  any  of  the  employes  con- 
cerned are  participants  or  beneficiaries  created  under  and  by  virtue  of 
any  Act  or  Acts  which  this  Act  supersedes,  and  in  any  of  the  groups 
designated  as  group  2  and  group  4,  in  Section  3  hereof,  shall  be  three 
persons  selected  from  among  the  elective  members  of  the  board  of 
trustees  of  the  pension  fund  or  funds,  or  pension  and  retirement  fund 
or  funds  in  which  the  employes  concerned  are  participants  or  bene- 
ficiaries created  under  and  by  virtue  of  any  Act  or  Acts  which  this  Act 
supersedes,  and  in  all  other  cases  shall  be  three  persons  designated  by 
the  Retirement  Commission  from  among  those  employes  who  are  to  be 
included  within  the  group  whose  affairs  are  to  be  administered  by  any 
such  Retirement  Board. 

At  each  such  election,  three  members  of  the  group  shall  be  elected, 
one  for  a  term  of  one  year,  one  for  a  term  of  two  years  and  one  for  a 
term  of  three  years,  or  until  their  successors  are  elected  and  qualified. 
Thereafter  one  such  member  of  each  such  Retirement  Board  shall  be 
elected  each  year  to  serve  for  a  term  of  three  years,  or  until  his  suc- 
cessor is  elected  and  qualified. 

All  elections  succeeding  the  first  shall  be  conducted  by  the  Retire- 
ment Board  of  the  group  from  whose  number' a  member  is  to  be  elected. 
Such  election  shall  be  held  during  the  month  of  October  in  each  year. 

(b)  Two  members  of  each  such  Retirement  Board  shall  be  ap- 
pointed as  follows: 

In  the  cases  of  the  Retirement  Boards  related  to  groups,  1,  3,  6, 
and  8,  the  mayor  of  the  city  shall  appoint  such  persons  with  the  ap- 
proval of  the  city  council.  In  the  cases  of  the  Retirement  Boards 
related  to  groups  2,  4,  5,  7,  9,  10,  and  11,  the  governor  of  this  state 
shall  appoint  such  persons  with  the  approval  of  the  senate. 

In  each  such  case  one  member  shall  be  appointed  for  a  term  of  one 
year  and  one  for  a  term  of  two  years,  and  annually  thereafter  one 
member  shall  be  appointed  to  serve  for  a  term  of  two  years.  Each  of 
such  persons  shall  continue  in  office  until  his  successor  shall  have  been 
appointed  and  qualified. 

In  case  of  a  vacancy  occurring  in  an  appointive  membership,  the 
executive  officer  as  hereinbefore  indicated,  shall  appoint  a  person  to 
serve  during  the  balance  of  the  unexpired  term. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  103 

If  a  vacancy  occurs  in  the  case  of  an  elective  membership,  such 
vacancy  shall  be  filled  by  appointment  made  by  the  remaining  elective 
members  of  the  Retirement  Board  in  question  until  a  person  who  shall 
be  elected  at  a  special  election  to  be  held  at  the  same  time  as  the  next 
regular  election  shall  be  elected  and  qualified  to  serve  for  the  remainder 
of  the  unexpired  term.  Such  special  election  shall  be  held  in  the  same 
manner  as  a  regular  election. 

The  members  of  all  retirement  boards  shall  serve  without  com- 
pensation except  that  any  member  who  is  an  employe  in  active  service 
shall  be  reimbursed  for  any  loss  of  salary  or  wages  incurred  while  at- 
tending meetings  of  the  board,  and  except  that  any  members  shall  be 
reimbursed  for  any  necessary  expenditures  incurred  while  serving 
upon  such  board. 

On  January  2,  1920,  each  Retirement  Board  created  under  and  by 
virtue  of  this  Act  shall  assume  jurisdiction  of  the  affairs  of  all  pension 
fund  or  funds  or  pension  and  retirement  fund  or  funds  which  relate 
to  the  group  or  groups  of  employes  whose  affairs  for  the  purposes  of 
this  Act  are  to  be  administered  by  such  Retirement  Board,  and  all 
moneys,  securities,  books,  records,  files  and  other  property  of  such 
pension  fund  or  funds  or  pension  and  retirement  fund  or  funds  shall 
be  delivered  to  such  Retirement  Board  by  the  board  of  trustees  of  such 
pension  fund  or  funds  or  pension  and  retirement  fund  or  funds.  When 
such  deliveries  have  been  completed,  the  board  of  trustees  of  each  such 
pension  fund  or  pension  and  retirement  fund  shall  cease  to  exist  and 
the  affairs  of  such  pension  fund  or  pension  and  retirement  fund  shall 
be  administered  by  such  Retirement  Board  thereafter. 

Section  5.    Custodian  of  Funds 

The  custodian  of  the  funds  in  each  of  the  groups  described  in 
Section  3  hereof  as  groups  1,  3,  6,  and  8,  shall  be  the  city  treasurer  of 
such  city,  the  custodian  of  the  funds  in  group  7  shall  be  the  county 
treasurer  of  such  county,  and  the  custodian  of  the  fund  in  each  of  the 
groups  described  in  Section  3  hereof  as  groups  2,  4,  5,  9,  10,  and  11, 
shall  be  the  treasurer  of  the  State  of  Illinois. 

Section  6.     Duties  of  Retirement  Boards 

Each  Retirement  Board  shall  elect  from  its  membership,  a  presi- 
dent and  a  secretary,  and  shall  appoint  such  medical,  clerical,  and  other 
employes  as  may  be  necessary. 

The  compensation  of  all  persons  employed  by  each  Retirement 
Board  shall  be  fixed  by  said  board. 

Each  Retirement  Board  shall  keep  a  record  of  all  its  proceed- 
ings which  shall  be  open  to  inspection  by  the  public. 


104  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Each  Retirement  Board  shall  certify  to  each  employer  under  its 
jurisdiction  the  amount  to  be  deducted  from  the  salary  of  each  em- 
ploye for  purposes  of  this  Act  for  each  pay  roll  period  from  and  after 
January  1,  1920. 

Each  Retirement  Board  shall  pay  all  moneys  received  to  the 
custodian  of  the  funds  of  such  Retirement  Board  for  use  according 
to  the  provisions  of  this  Act. 

Each  Retirement  Board  shall  keep  such  books  and  records  as  are 
prescribed  by  the  Retirement  Commission  for  the  transaction  of  its 
business.  It  shall  see  that  all  deductions  from  salary  are  made  ac- 
cording to  rates  certified  to  by  the  Retirement  Commission  and  that 
contributions  to  be  made  by  each  employer  under  the  provisions  of 
this  Act  are  being  duly  made,  and  that  all  funds  thus  collected  are 
being  deposited  when  collected  with  the  custodian  of  the  funds.  It 
shall  see  that  all  the  other  duties  of  each  employer  are  being  per- 
formed and  in  the  event  that  an  employer  fails  to  perform  any  duties 
imposed  on  said  employer  under  the  provisions  of  this  Act  it  shall  be 
the  duty  of  the  Retirement  Board  to  notify  the  Retirement  Commis- 
sion of  the  failure  of  such  employer  to  perform  such  duty. 

Each  Retirement  Board  shall  prepare  a  report  as  of  December 
31  of  each  year  for  the  Retirement  Commission  in  such  form  as  the 
Retirement  Commission  shall  prescribe,  setting  forth  the  income  and 
disbursements  of  the  year  of  each  of  the  funds  controlled  by  such 
Retirement  Board  and  the  amount  of  assets  credited  to,  and  the 
amount  of  liabilities  of,  each  such  fund  at  the  close  of  the  year.  Such 
statement  shall  include: 

(a)  The  total  of  the  reserves  on  all  annuities  being  paid  by  the 

board  from  the  Annuity  Reserve  Fund,  and  on  all  pros- 
pective annuities  to  be  paid  from  such  fund  to  employes 
who  are  over  the  Standard  Age  of  Retirement,  calculat- 
ing such  reserves  as  if  such  prospective  annuities  were 
actually  entered  upon. 

(b)  The  reserves  in  the  Employer's  Life  Insurance  Fund  and 

in  the  Employe's  Life  Insurance  Fund  on  the  life  insur- 
ance provided  for. 

(c)  The  total  of  the  liabilities  of  the  employer  or  employers  be- 

cause of  supplementary  annuities  and  supplementary  life 
insurance  provided  by  such  employer  or  employers  in- 
cluding the  reserves  on  the  supplementary  annuities  en- 
tered upon. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  105 

The  members  of  the  Retirement  Board  as  constituted  for  each 
group  of  employes  shall  be  the  trustees  of  all  the  funds  created  under 
this  Act  for  the  purpose  of  providing  the  benefits  stipulated  herein 
for  employes  in  such  group  and  paying  the  costs  of  administration 
for  such  group,  except  those  funds  that  are  specifically  mentioned  as 
being  under  the  control  of  the  Retirement  Commission.  Each  Retire- 
ment Board  shall  have  exclusive  control  and  management  of  all  funds 
of  which  the  members  of  such  board  are  trustees  and  full  power  to 
invest  the  same,  subject  however  to  all  the  terms,  conditions,  limita- 
tions and  restrictions  imposed  by  this  Act  upon  the  making  of  invest- 
ments. Subject  to  such  terms,  conditions,  limitations,  and  restrictions, 
such  Retirement  Board  shall  have  power  to  hold,  purchase,  sell,  assign, 
transfer,  or  dispose  of  any  of  the  securities  and  investments  in  which 
any  of  the  moneys  of  the  funds  created  by  this  Act  of  which  the  mem- 
bers of  such  board  are  the  trustees  shall  have  been  invested  as  well 
as  of  the  proceeds  of  said  investments  and  of  any  money  belonging 
to  said  funds. 

It  shall  be  the  duty  of  each  Retirement  Board  to  determine  the 
length  of  service  of  each  present  employe  rendered  prior  to  the  date 
when  such  employe  comes  under  the  provisions  of  this  Act.  Such 
service  shall  include:  (a)  All  service  rendered  to  any  employer  who 
is  an  employer  as  defined  by  this  Act.  (b)  Any  length  of  service 
allowed  by  any  act  relating  to  such  employe  which  this  Act  super- 
sedes, not  included  in  (a).  Under  such  rules  and  regulations  as  the 
Retirement  Board  shall  adopt,  subject  to  the  approval  of  the  Re- 
tirement Commission,  each  employe  shall  file  with  his  Retirement 
Board  a  detailed  statement  of  all  such  service  rendered  by  him  or 
allowed  to  him.  As  soon  as  practicable  thereafter,  the  Retirement 
Board  shall  verify  such  statement  as  to  prior  service  and  prior  credit, 
and  shall  submit  to  the  retirement  Commission  a  report  concerning 
same.  Upon  approval  by  the  Retirement  Commission,  of  the  length 
of  service  allowed  to  such  employe,  and  the  amount  to  the  credit  of 
such  employe,  the  Retirement  Board  shall  issue  a  certificate  to  such 
employe,  stating  the  length  of  prior  service  allowed,  the  amount  to  the 
credit  of  such  employe  for  old  age  retirement  annuity  purposes  for 
the  benefit  of  such  employe,  the  amount  of  life  insurance  assumed  by 
the  employer  for  the  benefit  of  such  employe,  and  the  amount  of  life 
insurance  to  be  assumed  by  the  employe.  Such  certificate  shall  be 
final  and  conclusive  as  to  length  of  prior  service  and  amount  of  credit 
unless  modified  by  the  Retirement  Board  either  of  its  own  volition 
or  upon  application  of  the  employe,  and  approved  by  the  Retirement 


106  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Commission,  within  one  year  from  the  date  when  the  certificate  or  a 
modified  certificate  shall  be  issued  to  the  employe. 

Any  time  during  which  a  present  employe  was  absent  on  leave 
of  absence  without  pay  shall  not  be  counted  in  computing  the  prior 
service  of  an  employe,  except  that  if  such  employe  was  a  participant 
in  or  beneficiary  of  a  pension  fund  or  a  pension  and  retirement  fund 
created  under  any  Act  which  this  Act  supersedes,  such  time  shall  be 
counted  in  accordance  with  the  provisions  of  such  superseded  Act. 

All  time  during  which  any  employe  was  absent  on  leave  of  ab- 
sence on  full  or  part  pay  shall  be  counted  in  computing  the  prior  ser- 
vice of  such  employe. 

For  the  purpose  of  computing  prior  service,  each  Retirement 
Board  shall  fix  and  determine  by  appropriate  rules  and  regulations, 
subject  to  the  approval  of  the  Retirement  Commission  and  subject 
to  the  provisions  of  the  appropriate  Act  which  this  Act  supersedes, 
how  much  service  rendered  on  the  basis  of  payment  by  the  hour  or 
day  shall  be  equivalent  to  a  year  of  service.  All  vacation  periods 
shall  be  counted  as  periods  of  service  for  employes  paid  on  an  annual 
basis.  No  employe  shall  be  allowed  credit  for  more  than  one  year  of 
service  during  any  service  year. 

If  any  employe  does  not  file  a  statement  showing  the  amount  of 
prior  service  rendered,  or  if  the  Retirement  Board  in  question  is  unable 
to  verify  the  statements  contained  in  the  statement  filed  by  any  em- 
ploye, said  Retirement  Board,  subject  to  the  approval  of  the  Retire- 
ment Commission,  shall  fix  the  period  for  which  such  employe  shall 
receive  credit-  for  prior  service  from  such  information  as  is  available, 
and  such  decision  of  said  Retirement  Board  shall  be  final  unless  modi- 
fied by  said  Retirement  Board  with  the  approval  of  the  Retirement 
Commission  within  one  year  from  the  date  of  such  decision. 

Section  7.     Retirement  Commission 

A  Retirement  Commission  of  three  members  is  hereby  created 
to  be  appointed  by  the  Governor  of  this  State  with  the  approval  of 
the  Senate. 

On  the  date  when  this  Act  takes  effect,  or  as  soon  thereafter  as 
practicable,  the  Governor  shall  appoint  the  members  to  serve,  one 
for  a  period  of  two  years,  one  for  a  period  of  four  years,  and  one 
for  a  period  of  six  years,  from  the  date  when  this  Act  takes  effect, 
and  until  their  successors  are  appointed  and  qualified.  Thereafter 
each  appointment  shall  be  made  for  a  period  of  six  years.  The  mem- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  107 

bers  so  appointed  shall  hold  office  until  their  successors  are  appointed 
and  qualified.  The  Governor  shall  designate  which  one  of  such 
members  shall  be  chairman  of  such  commission.  In  case  a  vacancy 
shall  occur  during  any  such  term,  the  Governor  with  the  approval  of 
the  Senate  shall  appoint  a  person  to  serve  for  the  balance  of  the  unex- 
pired  term. 

The  compensation  of  the  members  of  the  Retirement  Commission 
shall  be  five  thousand  dollars  per  year.  They  shall  also  be  reimbursed 
for  any  necessary  expenses  incurred  in  service  upon  said  Commission. 

The  Retirement  Commission  shall  appoint  a  secretary,  an  actuary, 
and  such  medical,  clerical,  and  other  employes  as  may  be  necessary. 
The  compensation  of  such  employes  shall  be  fixed  by  the  Retirement 
Commission  and  paid  from  appropriations  to  be  made  by  the  General 
Assembly. 

The  members  of  the  Retirement  Commission  shall  be  trustees 
of  all  money  and  property  in  the  equalization  funds  described  in  Sec- 
tion 16  hereof.  The  Retirement  Commission  shall  have  exclusive  con- 
trol and  management  of  all  such  funds,  and  full  power  to  invest  the 
moneys  of  same,  subject  to  the  terms,  conditions,  limitations  and  re- 
strictions concerning  investments  as  stated  in  this  Act,  and  shall  have 
power  for  the  purposes  of  this  Act,  to  hold,  purchase,  sell,  assign, 
transfer  or  dispose  of  any  of  the  securities  and  investments  in  which 
any  of  the  moneys  of  the  funds  stated  shall  have  been  invested. 

Section  8.     Duties  of  the  Retirement  Commission 
It  shall  be  the  duty  of  the  Retirement  Commission : 

(1)  To  prescribe  the  system  of  accounting  for  and  the  forms 
of  books  and  records  to  be  kept  by  each  Retirement  Board  in  accord- 
ance with  the  provisions  of  this  Act  and  to  supervise  the  keeping  of 
such  accounts  and  records. 

(2)  To  furnish  to  the  several  Retirement  Boards  such  actuarial 
advice  and  assistance  as  may  in  the  opinion  of  the  Retirement  Com- 
mission be  necessary. 

(3)  To  take  such  steps  as  in  its  judgment  seem  advisable  to  en- 
force compliance  on  the  part  of  an  employer  of  the  provisions  of  this 
Act. 

(4)  To  make  an  examination  of  the  affairs  of  each  Retirement 
Board  at  least  once  every  two  years. 

(5)  To  prepare  a  report  annually  on  the  funds  controlled  by 
each  Retirement  Board  as  of  'the  close  of  the  business  on  December 
31.     Such  report  shall  contain  a  statement  of  income  and  disburse- 


108  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

ments  of  the  year  and  assets  and  liabilities  at  the  close  of  the  year  for 
each  fund  held  for  the  benefit  of  each  group  so  as  to  exhibit  the  con- 
dition of  each  such  fund  at  such  time. 

(6)  To  prepare  a  report  as  of  December  31  of  each  year,  con- 
cerning the  income  and  disbursements  of  the  year  and  the  assets  and 
liabilities  at  the  clos"e  of  the  year,  on  each  of  the  funds  of  which  the 
members  of  said  Retirement  Commission  are  the  trustees,  and  a  state- 
ment setting  forth  clearly: 

(a)  The  reserves  on  all  annuities  being  paid  out  of  each  Annuity 
Reserve  Fund  of  the  system,  and  on  all  prospective  annuities  to  be 
paid  from  such  fund  to  employes  who  are  over  the  Standard  Age  of 
Retirement,  together  with  the  amount  held  by  the  Retirement  Com- 
mission for  equalization  of  annuity  payments,  in  comparison  with  the 
reserves  on  such  annuities  under  McClintock's  Annuitants'  Table,  male 
or  female,  as  such  table  applies,  with  three  per  cent  interest. 

(b)  The  liabilities  of  the  employer  or  employers  because  of  sup- 
plementary annuities   and  supplementary  life   insurance  provided  by 
such  employer  or  employers,  including  the  reserve  on  supplementary 
annuities  entered  upon,  according  to  the  American  Experience  Table 
of  Mortality  and  rate  of  interest  applicable,  in  comparison  with  the 
amount  of  assets  credited  to,  and  the  future  resources  of  the  Em- 
ployer's   Supplementary   Fund,   for   each   group   of   employes   in   the 
system. 

(c)  Such  other  facts,  and  data,  as  may  be  of  use  in  determining 
the  financial  condition  of  each  fund  of  the  system,  and  in  the  advance- 
ment of  knowledge  concerning  annuities  and  insurances,  together  with 
such  recommendations  as  said  Commission  may  deem  advisable. 

The  Retirement  Commission  shall  submit  said  report  to  the  Gov- 
ernor, and  copies  of  such  report  shall  be  printed  for  general  distribu- 
tion. 

Section  9.     Duties  of  the  Employer 

Each  employer  shall,  before  employing  any  person  to  whom  this 
Act  shall  apply,  notify  such  person  of  his  duties  and  obligations  under 
this  Act  as  a  condition  of  his  employment. 

During  some  month  in  each  year,  to  be  fixed  by  the  Retirement 
Commission,  each  employer  shall  certify  to  the  proper  Retirement 
Board  the  name  of  each  employe  to  whom  this  Act  applies. 

Each  employer  shall,  on  the  first  day  of  each  calendar  month, 
notify  the  proper  Retirement  Board  of  the  employment  of  new  em- 
ployes, removals,  withdrawals,  deaths  and  changes  in  salaries  of 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


109 


employes,  that  shall  have  occurred  during  the  month  preceding,  setting 
forth  the  dates  upon  which  such  employments,  removals,  withdrawals, 
deaths,  and  changes  in  salaries  occurred. 

Each  employer  shall  furnish  such  other  information  to  the  proper 
Retirement  Board  as  such  Retirement  Board  may  reasonably  require 
in  the  discharge  of  its  duties. 

After  January  1,  1920,  each  employer  shall  cause  to  be  deducted 
from  each  payment  thereafter  made  on  account  of  salary  or  wages  of 
each  employe  such  an  amount  as  shall  be  certified  to  by  the  proper 
Retirement  Board  as  required  under  the  provisions  of  this  Act.  Each 
employer  shall  certify  to  the  treasurer  of  said  employer,  on  each  and 
every  pay  roll,  a  statement  as  voucher  for  the  amounts  so  deducted, 
and  shall  send  a  duplicate  of  such  statement  to  the  secretary  of  the 
proper  Retirement  Board.  The  treasurer  of  each  employer,  on  receipt 
from  the  employer  of  such  voucher  for  deductions  from  salaries  or 
wages  of  employes,  shall  transmit  monthly,  or  at  such  other  times  as 
a  Retirement  Board  shall  designate,  to  the  secretary  of  such  Retire- 
ment Board,  the  amounts  specified  in  such  voucher. 

Each  employer  shall  keep  such  records  as  a  Retirement  Board 
with  the  approval  of  the  Retirement  Commission  may  require. 

Section  10.     Legal  Counsel 

In  cities  of  over  one  million  inhabitants,  the  corporation  counsel 
of  such  city  shall  be  the  legal  advisor  of  all  Retirement  Boards  for 
groups  described  as  numbers  1,  3,  6  and  8  in  Section  3  hereof.  The 
attorney  general  of  the  State  of  Illinois  shall  be  the  legal  advisor  of 
all  other  Retirement  Boards  and  the  Retirement  Commission* 

Section  11.     Oath  of  Office  and  Qualification 

Each  person  elected  or  appointed  to  membership  upon  a  Retire- 
ment Board  or  the  Retirement  Commission  shall  take  an  oath  of  office 
that  he  will  diligently  and  honestly  'administer  the  affairs  of  the  office 
to  which  he  was  elected  or  appointed  and  that  he  will  not  knowingly 
violate  or  willfully  permit  to  be  violated  any  of  the  provisions  of  law 
applicable  to  this  Act.  Such  oath  shall  be  subscribed  by  the  person 
making  it,  and  certified  to  by  the  officer  before  whom  it  is  taken,  and 
deposited  with  the  secretary  of  the  appropriate  Board  or  Commission. 
Anyone  after  appointment  or  election  shall  be  deemed  to  have  qualified 
for  membership  on  a  Retirement  Board  or  the  Retirement  Commission 
when  such  certificate  is  deposited  with  the  secretary  of  such  board  or 
commission.  Such  secretary  shall  keep  a  copy  of  such  certificate  on 
file  in  his  office  and  shall,  if  he  be  secretary  of  a  Retirement  Board, 


110  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

file  the  original  with  the  Retirement  Commission,  or  if  he  be  the 
secretary  of  the  Retirement  Commission  he  shall  file  the  original  with 
the  Secretary  of  State  of  Illinois. 

Section  12.     Payments  and  Deposits 

All  payments  from  the  funds  created  by  this  Act  shall  be  made 
by  the  custodian  of  the  fund  only,  and  only  upon  warrant  or  voucher 
signed  by  the  president  of  the  appropriate  board  or  the  chairman  of  the 
Commission  and  countersigned  by  the  secretary  of  such  board  or  com- 
mission and  no  warrant  nor  voucher  shall  be  drawn  except  by  order 
of  such  board  or  commission  duly  entered  in  the  record  of  its  pro- 
ceedings. 

For  the  purpose  of  meeting  disbursements  for  annuities  and  other 
payments  to  any  group  of  employes  in  excess  of  receipts,  there  may 
be  kept  as  available  fund  by  any  Retirement  Board  an  amount  not 
exceeding  ten  per  cent  of  the  total  amount  in  the  several  funds  of  such 
board  for  annuity  purposes,  and  to  meet  disbursements  for  life  insur- 
ance, not  exceeding  ten  per  cent  of  the  total  amount  in  the  life  insur- 
ance funds  of  said  board  on  deposit  in  any  bank  in  this  State  organized 
under  the  laws  thereof  or  under  the  laws  of  the  United  States,  or  with 
any  trust  company  incorporated  by  any  law  of  this  State;  provided 
said  bank  or  trust  company  shall  furnish  adequate  security  for  said 
funds ;  and  provided  that  the  sum  so  deposited  in  any  one  bank  or  trust 
company  shall  not  exceed  twenty-five  per  cent  of  the  paid-up  capital 
and  surplus  of  said  bank  or  trust  company.  The  selection  by  a  Retire- 
ment Board  of  such  bank  or  trust  company  and  the  maximum  amount 
that  may  be  deposited  at  any  one  time  in  such  bank  must  have  the 
approval  of  the  Retirement  Commission  and  it  shall  be  the  duty  of  the 
Retirement  Commission  to  see  that  no  funds  created  under  the  pro- 
visions of  this  Act  are  held  at  any  one  time  by  any  bank  or  trust 
company  in  excess  of  twenty-five  per  cent  of  the  paid-up  capital  and 
surplus  of  said  bank  or  trust  company. 

Section  13.     Investments 

The  moneys  under  the  control  of  any  Retirement  Board  or  the 
Retirement  Commission  created  under  the  provisions  of  this  Act  shall 
be  invested  in  bonds  of  the  United  States  or  of  this  State  or  in  bonds 
of  any  county,  city,  village,  or  incorporated  town  in  this  State,  or  in 
federal  farm  loan  bonds  issued  by  any  Federal  Reserve  Bank,  provided 
such  bonds  have  been  previously  approved  by  the  Retirement  Com- 
mission as  valid  and  sufficient  securities  in  which  to  invest  moneys 
held  by  such  Retirement  Board  or  said  Retirement  Commission,  or  in 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  111 

anticipation  warrants   issued  by  the  Retirement  Commission  hereby 
created  as  provided  in  Section  16  hereof. 

Section  14.     Funds  of  Retirement  Boards 

Each  Retirement  Board  shall  establish  and  administer  eleven 
funds  to  be  known  respectively  as 

(1)  Expense  fund;  (2)  Employer's  Annuity  Fund; 
(3)  Children's  Annuity  Fund;  (4)  Compensation  Fund; 
(5)  Salary  Deductions  for  Annuity  Fund;  (6)  Annuity  Re- 
serve Fund;  (7)  Employer's  Life  Insurance  Fund;  (8)  Em- 
ployes' Life  Insurance  Fund;  (9)  Sickness  and  Accident 
Fund;  (10)  Investment  and  Interest  Fund;  and  (11)  Employ- 
er's Supplementary  Fund. 

In  the  month  of  July,  1920,  for  a  period  covering  the  six  months 
next  preceding,  and  in  July  of  each  year  thereafter,  for  a  period 
covering  the  year  next  preceding,  each  employer  shall  pay  into  these 
funds  such  amounts,  certified  to  by  the  proper  Retirement  Board, 
as  are  required  to  be  contributed  by  such  employer  under  the  pro- 
visions of  this  Act. 

Expense  Fund 

Such  amounts  as  shall  be  paid  to  each  Retirement  Board  to  de- 
fray the  administrative  expenses  thereof  shall  be  paid  into  a  fund  to 
be  known  as  the  Expense  Fund. 

During  the  year  1920  each  employer  concerned  shall  pay  to  the 
Retirement  Board  of  each  group  designated  as  numbers  1,  3,  6,  and  8, 
in  Section  3  hereof  an  amount  equal  to  one  tenth  of  one  per  cent  of 
the  aggregate  salaries  for  the  year  1919  of  the  employes  involved,  and 
to  the  Retirement  Board  of  each  group  designated  as  numbers  2,  4,  5, 
7,  9,  10  and  11  in  Section  3  hereof  an  amount  equal  to  one-fifth  of 
one  per  cent  of  the  aggregate  salaries  for  the  year  1919  of  the  employes 
involved  of  such  employer.  Thereafter  such  employer  or  employers 
shall  pay  to  each  such  Retirement  Board  such  sums  as  such  Retirement 
Board  shall  certify  to  as  necessary  to  defray  the  administrative  expense 
of  such  Board,  but  in  no  case  shall  such  sums  exceed  amounts  equal  to 
one  tenth  of  one  per  cent  of  the  salaries  of  the  employes  included  in 
groups  number  1,  3,  6  and  8  as  above  stated  for  the  preceding  calendar 
year,  nor  one-fifth  of  one  per  cent  of  the  salaries  of  the  employes  in- 
cluded in  groups  numbered  2,  4,  5,  7,  9,  10  and  11  as  above  stated  for 
the  preceding  calendar  year. 

If  at  the  end  of  any  calendar  year  there  shall  be  an  unexpended 
balance  in  the  Expense  Fund  of  any  Retirement  Board,  the  amount 


112  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

of  such  balance  shall  be  prorated  among  and  credited  to  the  em- 
ployers involved  to  reduce  the  amounts  which  each  such  employer 
shall  pay  into  such  Expense  Fun$  during  the  next  calendar  year. 
If  at  any  time  there  is  not  a  sum  sufficient  to  defray  the  current 
expenses  of  any  Retirement  Board  in  the  Expense  Fund  of  said 
Board,  an  amount  equal  to  the  sum  necessary  for  such  expenses  may 
be  transferred  from  any  other  fund  under  the  control  of  such  Re- 
tirement Board  until  the  end  of  the  calendar  year  in  question  and 
an  amount  equal  to  that  so  transferred  with  regular  interest  shall  be. 
charged  against  the  employes  involved,  each  such  employe  being 
charged  an  equal  part  of  the  whole  sum.  A  sum  equal  to  that  charged 
to  each  employe  shall  be  deducted  from  the  first  payment  on  account 
of  salary  of  such  employe  made  in  the  succeeding  calendar  year.  A 
sum  equal  to  that  so  transferred  shall  be  paid  into  the  fund  from 
which  transfer  was  made  with  regular  interest  during  such  succeed- 
ing calendar  year. 

Employer's  Annuity  Fund 

Such  amounts  as  are  required  under  the  provisions  of  this  Act 
to  be  paid  by  an  employer  towards  Old  Age  Retirement  Annuities, 
exclusive  of  amounts  paid  to  provide  supplementary  annuities,  for 
present  employes,  shall  be  paid  into  a  fund  to  be  known  as  the  Em- 
ployer's Annuity  Fund. 

If  there  be  more  than  one  employer  involved  in  a  group  of  em- 
ployes as  stated  in  Section  3  hereof,  each  such  employer  shall  con- 
tribute to  this  Fund  such  amounts  as  are  required  to  be  contributed 
by  such  employer  for  Old  Age  Retirement  Annuity  for  each  employe 
of  such  employer,  exclusive  of  the  amounts  necessary  to  provide  sup- 
plementary annuities  for  such  present  employe. 

In  this  fund  an  individual  account  shall  be  kept  with  each  em- 
ploye who  is  under  the  Standard  Age  of  Retirement,  and  as  con- 
tributions are  received  from  the  employer,  the  account  of  each  such 
employe  shall  be  credited  with  the  amount  which  the  employer  has 
contributed  towards  the  Old  Age  Retirement  Annuity  of  such  em- 
ploye. At  least  once  each  year  such  account  shall  be  credited  with 
the  proper  interest  accumulations.  On  the  date  when  such  employe 
enters  upon  his  annuity  or  attains  the  Standard  Age  of  Retirement, 
whichever  event  shall  first  occur,  the  accumulated  amount  to  the  credit 
of  such  employe  on  such  date  shall  be  transferred  to  the  Annuity  Re- 
serve Fund  and  placed  to  the  credit  of  such  employe  in  such  fund. 

If  an  employe  withdraws  from  service  before  his  attainment  of 
the  Minimum  Age  of  Retirement  and  retains  his  eligibility  for  annuity, 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  113 

the  total  amount  thus  credited  to  the  account  of  such  employe  and 
interest  accumulations  thereon  shall  remain  in  this  fund  until  the 
employe  enters  upon  annuity  or  attains  the  Standard  Age  of  Retire- 
ment, whichever  event  shall  first  occur,  and  the  amount  of  such  accu- 
mulation available  under  the  provisions  of  this  Act  for  Old  Age 
Retirement  Annuity  of  such  employe  shall  then  be  transferred  from 
this  Fund  to  the  Annuity  Reserve  Fund  and  be  placed  to  the  credit 
of  such  employe  in  such  Fund. 

If  a  male  employe  dies  while  in  service  before  attainment  of  the 
Standard  Age  of  Retirement,  leaving  a  widow,  or  if  a  male  employe 
who  withdrew  from  service  before  his  attainment  of  the  Minimum 
Age  of  Retirement  dies  before  entering  upon  his  annuity,  leaving  a 
widow  eligible  for  annuity,  the  accumulation  or  that  part  of  the 
accumulation  on  the  date  of  death  of  such  employe,  necessary  to 
provide  the  annuity  stated  herein  for  such  widow  shall  be  transferred 
from  this  Fund  to  the  Annuity  Reserve  Fund  and  be  placed  to  the 
credit  of  such  widow  in  such  Fund. 

Children's  Annuity  Fund 

Into  a  fund  to  be  known  as  the  Children's  Annuity  Fund  shall 
be  paid:  (a)  All  amounts  received  from  the  employer  to  provide 
for  children's  annuities  as  provided  for  in  this  Act.  (b)  Such  amounts, 
payable  from  other  funds,  as  are  necessary  for  children's  annuities 
under  the  provisions  of  this  Act,  which  funds,  were  they  not  neces- 
sary for  this  purpose,  would  be  refunded  to  children  or  parents  of 
the  deceased  employe. 

'During  the  year  1920,  each  employer  concerned  shall  pay  to  each 
Retirement  Board,  for  children's  annuities,  an  amount  equal  to  one 
half  of  one  per  cent  of  the  aggregate  salaries  for  the  year  1919  of 
the  employes  involved  of  such  employer.  Thereafter,  such  employer 
shall  pay  to  each  such  Retirement  Board  such  proportionate  part  of 
the  total  amount  certified  to  by  sucfi  Retirement  Board  as  being  neces- 
sary for  children's  annuities  as  the  aggregate  salaries  of  all  the  em- 
ployes of  such  employer  in  the  group  bears  to  the  aggregate  salaries 
of  the  employes  of  all  employers  involved  in  the  group. 

If  at  any  time  there  is  not  in  the  Children's  Annuity  Fund  of  a 
Retirement  Board  a  sum  sufficient  to  pay  annuities  to  children  accord- 
ing to  the  provisions  of  this  Act,  a  sum  equal  to  the  amount  required 
for  such  purpose  may  be  transferred  to  such  fund  from  any  other 
fund  under  the  control  of  such  board  and  used  for  the  payment  of 
such  annuities.  When  thereafter  any  sum  in  excess  of  that  required 
for  current  payment  of  annuities  from  the  Children's  Annuity 'Fund 


> 

114  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

of  such  Board  is  received  into  such  fund,  it  shall  be  transferred  from 
such  fund  and  placed  in  the  fund  or  funds  from  which  such  sums  were 
taken  until  a  sum  equal  to  the  full  amount  so  taken  with  regular 
interest  thereon  shall  be  returned  to  the  fund  or  funds  from  which 
such  transfer  or  transfers  were  made. 

All  children's  annuities  shall  be  paid  from  this  fund. 

Compensation  Fund 

Such  amounts  as  shall  be  paid  by  the  employer  to  provide  the 
annuities  provided  for  herein,  in  cases  of  death  or  injury  of  an  em- 
ploye in  consequence  of  the  direct  performance  of  duty  shall  be  paid 
into  a  fund  to  be  known  as  the  Compensation  Fund. 

There  shall  be  paid  from  this  fund: 

(a)  Amounts  equal  to  the  combined  percentages  of  salary  of  the 
disabled  employe  required  from  employer  and  employe  for  Old  Age 
Retirement  Annuity  and  Life  Insurance  purposes  for  such  employe 
during  the   period   of   such  disability.     Such   amounts  shall  be  paid 
into  the  Employer's  Annuity  Fund,  the  Salary  Deductions  for  An- 
nuity Fund,  the  Employer's  Life  Insurance  Fund  and  the  Employes' 
Life  Insurance  Fund  respectively  in  proper  proportions  and  credited 
to  such  employe  in  such  funds. 

(b)  Such  amounts  as  are  necessary  to  provide  the  annuity  or 
annuities  stated  in  this  Act  in  the  case  of  death  or  injury  of  an 
employe  in  consequence  of  the  direct  performance  of  duty,  except 
children's  annuities,  in  excess  of  any  annuity  which  may  be  provided 
from  funds  placed  to  the  credit  of  such  employe  or  the  widow  of 
such  employe  in  the  Annuity  Reserve  Fund. 

During  the  year  1920,  each  employer  concerned  shall  pay  to  each 
Retirement  Board  to  provide  the  annuities  provided  for  herein,  in 
cases  of  death  or  injury  of  an  employe  in  consequence  of  the  direct 
performance  of  duty,  an  amount  equal  to  one  half  of  one  per  cent 
of  the  aggregate  salaries  for  the  year  1919  of  the  employes  involved 
of  such  employer.  Thereafter,  such  employer  shall  pay  to  each  such 
Retirement  Board  such  proportionate  part  of  the  total  amount  cer- 
tified to  by  such  Retirement  Board  as  being  necessary  for  annuities 
in  cases  of  death  or  injury  of  an  employe  in  consequence  of  the  direct 
performance  of  duty  as  the  aggregate  salaries  of  all  the  employes  of 
such  employer  in  the  group  bears  to  the  aggregate  salaries  of  the 
employes  of  all  employers  involved  in  such  group. 

If  at  any  time  there  is  not  in  the  Compensation  Fund  of  a  Re- 
tirement Board  a  sum  sufficient  to  pay  annuities  to  employes  in  cases 
of  death  or  injury  in  consequence  of  the  direct  performance  of  duty, 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919       .  115 

according  to  the  provisions  of  this  Act,  a  sum  equal  to  the  amount 
required  for  such  purpose  may  be  transferred  to  such  fund  from  any 
other  fund  under  the  control  of  such  Board  and  used  for  the  pay- 
ment of  such  annuities.  When  thereafter  any  sum  in  excess  of  that 
required  for  current  payment  of  annuities  from  the  Compensation 
Fund  of  such  board  is  received  into  such  fund,  it  shall  be  transferred 
from  such  fund  and  placed  in  the  fund  or  funds  from  which  such 
sums  were  taken  until  a  sum  equal  to  the  full  amount  so  taken  with 
regular  interest  thereon  shall  be  returned  to  the  fund  or  funds  from 
which  such  transfer  or  transfers  were  made. 

Salary  Deductions  for  Annuity  Fund 

The  amounts  deducted  from  salaries  of  employes  for  Old  Age 
Retirement  Annuity  purposes  shall  be  paid  into  a  fund  to  be  known 
as  the  Salary  Deductions  for  Annuity  Fund. 

In  this  fund  an  individual  account  shall  be  kept  with  each  em- 
ploye who  is  under  the  Standard  Age  of  Retirement  when  he  comes 
under  the  provisions  of  this  Act,  until  such  employe  attains  the 
Standard  Age  of  Retirement  or  enters  upon  annuity  if  such  employe 
enters  upon  annuity  before  attainment  of  such  age,  and  with  each 
former  employe,  after  his  withdrawal  from  service,  if  such  former 
employe  retains  his  eligibility  for  Old  Age  Retirement  Annuity,  until 
such  employe  enters  upon  annuity.  As  deductions  are  made  from  the 
salary  of  the  employe,  each  such  account  shall  be  credited  with  the 
amount  of  each  such  deduction,  and  at  least  once  each  year,  such 
account  shall  be  credited  with  the  proper  interest  accumulations.  When 
any  such  employe  enters  upon  his  annuity  or  attains  the  Standard  Age 
of  Retirement,  whichever  event  shall  first  occur,  the  accumulations  to 
the  credit  ef  such  employe  on  such  date  shall  be  transferred  to  the 
Annuity  Reserve  Fund,  and  placed  to  the  credit  of  such  employe  in 
such  fund. 

Any  deductions  from  salary  for  Old  Age  Retirement  Annuity 
purposes  required  from  a  present  employe  after  his  attainment  of 
the  Standard  Age  of  Retirement,  less  the  amount  of  interest  to  be 
deducted  therefrom  shall  be  paid  into  this  fund,  until  such  time  as 
all  such  payments  have  been  fully  made,  or  until  the  employe  retires 
on  annuity,  whichever  event  shall  first  occur.  They  shall  then  be 
transferred  to  the  Annuity  Reserve  Fund  and  placed  to  the  credit 
of  such  employe  in  such  fund. 

If  a  male  employe  dies  while  in  service  before  attaining  the 
Standard  Age  of  Retirement,  leaving  a  widow,  or  if  a  male  employe 
who  withdrew  from  service  before  his  attainment  of  the  Minimum 


116  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Age  of  Retirement  dies  before  entering  upon  annuity,  leaving  a  widow 
eligible  for  annuity,  the  accumulation  on  the  date  of  death  of  such 
employe  from  deductions  from  salary  for  Old  Age  Retirement  An- 
nuity shall  be  transferred  from  this  Fund  to  the  Annuity  Reserve 
Fund  and  placed  to  the  credit  of  such  widow  in  such  fund. 

If  a  male  employe  dies  while  in  service  before  attaining  the 
Standard  Age  of  Retirement,  leaving  no  widow,  but  leaving  children 
eligible  for  annuity,  or  if  a  male  employe  who  withdrew  from  ser- 
vice upon  or  after  his  attainment  of  the  Minimum  Age  of  Retirement 
dies  before  entering  upon  annuity,  leaving  no  widow,  but  leaving  chil- 
dren eligible  for  annuity,  all  or  such  part  of  the  accumulation  on  the 
date  of  death  of  such  employe  from  deductions  from  salary  for  Old 
Age  Retirement  Annuity  as  may  be  necessary  to  provide  annuities  for 
the  children  of  such  employe  shall  be  transferred  from  this  fund  to 
the  Children's  Annuity  Fund  and  placed  to  the  credit  of  such  chil- 
dren in  such  fund. 

Annuity  Reserve  Fund 

There  shall  be  paid  into  a  fund  to  be  known  as  the  Annuity  Re- 
serve Fund,  such  amounts  as  shall  be  transferred  to  it  from  the  Em- 
ployer's Annuity  Fund,  the  Salary  Deductions  for  Annuity  Fund,  the 
Employer's  Life  Insurance  Fund,  the  Employes'  Life  Insurance  Fund, 
the  Investment  and  Interest  Fund,  or  any  other  fund  from  which 
payment  to  this  fund  is  required. 

When  an  accumulation  for  Old  Age  Retirement  Annuity  is  placed 
to  the  credit  of  an  employe  in  this  fund,  there  shall  be  deducted  from 
the  amount  of  such  accumulation,  an  amount  equal  to  2  per  cent  of 
the  amount  of  such  accumulation,  to  provide  for  refunds  in  accord- 
ance with  the  provisions  of  this  Act.  The  amount  of  annuity  which 
the  remainder  of  the  accumulation  will  provide  according  to  the  Amer- 
ican Experience  Table  of  Mortality  and  rate  of  interest  applicable 
shall  then  be  determined.  The  amount  of  annuity  thus  determined 
shall  be  the  amount  to  be  paid  to  such  employe  from  this  fund.  The 
amount  of  annuity  thus  determined  shall  also  be  the  amount  subject 
to  equalization  under  the  Annuity  Equalization  Fund  as  stated  in  Sec- 
tion 16  hereof  or  the  amount  payable  from  this  fund  as  stated  under 
the  Compensation  Fund  in  this  section  above  in  case  of  injury  in 
consequence  of  the  direct  performance  of  duty,  either  or  both  as  may 
be  necessary. 

When  an  accumulation  for  Old  Age  Retirement  Annuity  of  an 
employe  is  placed  to  the  credit  of  the  widow  of  such  employe  in  this 
fund,  there  shall  be  deducted  from  the  amount  of  such  accumulation 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  117 

an  amount  equal  to  2  per  cent  thereof  to  provide  for  refunds  in  ac- 
cordance with  the  provisions  of  this  Act.  The  amount  of  annuity 
which  the  remainder  of  the  accumulation,  together  with  the  amounts 
of  life  insurance  transferred  to  this  fund  from  the  Employer's  Life 
Insurance  Fund  and  the  Employes'  Life  Insurance  Fund,  will  pro- 
vide according  to  the  American  Experience  Table  of  Mortality  and  4 
per  cent  interest  shall  then  be  determined.  The  amount  of  annuity 
thus  determined  shall  be  paid  to  such  widow  from  this  fund.  The 
amount  of  annuity  thus  determined  shall  also  be  the  amount  subject 
to  equalization  under  the  Annuity  Equalization  Fund  as  stated  in  Sec- 
tion 16  hereof,  or  the  amount  payable  from  this  fund  as  stated  under 
the  Compensation  Fund  in  this  section  above  in  case  of  death  or  in- 
jury of  the  employe  in  consequence  of.  the  direct  performance  of  duty, 
either  or  both  as  may  be  necessary. 

Employer's  Life  Insurance  Fund 

The  contributions  to  be  made  by  the  employer  towards  providing 
Life  Insurance  for  employes,  exclusive  of  any  amounts  paid  towards 
supplementary  Life  Insurance  for  present  employes,  as  stated  in  Sec- 
tion 32  hereof,  shall  be  paid  into  a  fund  to  be  known  as  the  Employer's 
Life  Insurance  Fund. 

If  there  be  more  than  one  employer  involved  in  a  group  of  em- 
ployes, as  stated  in  Section  3  hereof,  each  such  employer  shall  con- 
tribute to  this  fund  such  amounts  as  are  required  to  be  contributed 
by  such  employer  for  life  insurance  purposes  for  each  future  entrant 
employe  of  such  employer  and  for  each  present  employe  of  such  em- 
ployer exclusive  of  the  amounts  necessary  to  provide  supplementary 
life  insurance  for  such  present  employe. 

In  this  fund,  each  individual  insured  shall  be  credited  with  the 
reserve  on  the  part  of  the  insurance  assumed  by  the  employer. 

If  a  male  employe  dies  while  in  service  before  his  attainment  of 
the  Standard  Age  of  Retirement,  leaving  a  widow,  or  if  a  male  em- 
ploye who  withdrew  from  service  with  rights  to  annuity  which  he 
retains,  dies  before  entering  upon  annuity,  -leaving  a  widow  eligible 
for  annuity,  an  amount  equal  to  the  amount  of  life  insurance  pro- 
vided by  the  employer  for  such  employe  shall  be  transferred  from 
this  fund  to  the  Annuity  Reserve  Fund  and  placed  to  the  credit  of 
such  widow  in  such  fund. 

The  amount  of  any  insurance  provided  by  the  employer,  payable 
otherwise  than  in  annuity,  shall  be  paid  from  this  fund. 

At  such  time  as  the  reserve  on  the  insurance  provided  for  an 
employe  is  convertible  to  a  survivorship  annuity  for  the  wife  of  such 


118  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

employe,  an  amount  equal  to  the  reserve  in  this  fund  to  the  credit 
of  such  employe  shall  be  transferred  to  the  Annuity  Reserve  Fund 
and  placed  to  the  credit  of  such  wife  in  such  fund. 

The  Retirement  Board  shall  determine  as  of  December  31  of 
each  year  the  amount  of  interest  required  to  maintain  the  reserve  for 
such  calendar  year  and  the  amount  thus  determined  shall  be  trans- 
ferred from  the  Investment  and  Interest  Fund  to  this  fund.  The 
Retirement  Board  shall  also  determine  as  of  such  date  the  total  lia- 
bilities of  this  fund  including  the  Reserve  Liability.  If  the  assets 
credited  to  this  fund  on  such  date,  exclusive  of  those  arising  from 
refunds  to  the  employer  on  such  date,  should  exceed  the  liabilities  of 
this  fund,  the  excess  shall  be  paid  to  the  Employes'  Life  Insurance 
Fund.  If  the  total  liabilities  of  this  fund  should  exceed  the  amounts 
credited  to  this  fund,  exclusive  of  those  arising  from  refunds  to  the 
employer  on  such  date,  an  amount  equal  to  the  amount  of  such  deficit 
shall  be  paid  to  this  fund  from  the  Employes'  Life  Insurance  Fund. 

Employes'  Life  Insurance  Fund 

All  deductions  from  salaries  to  provide  the  Life  Insurance  ben- 
efits stipulated  in  this  Act  shall  be  paid  into  a  fund  to  be  known  as 
the  Employes'  Life  Insurance  Fund. 

In  this  fund,  each  individual  insured  by  the  fund  shall  be  credited 
with  the  reserve  on  the  part  of  the  insurance  assumed  by  such  in- 
dividual. 

If  a  male  employe  dies  while  in  service  before  his  attainment  of 
the  Standard  Age  of  Retirement,  leaving  a  widow,  or  if  a  male  em- 
ploye who  withdrew  from  service  with  rights  to  annuity  which  'he 
retains  dies  before  entering  upon  annuity,  leaving  a  widow  eligible  for 
annuity,  an  amount  equal  to  the  amount  of  life  insurance  provided 
by  such  employe  shall  be  transferred  from  this  fund  and  placed  in 
the  Annuity  Reserve  Fund  to  the  credit  of  such  widow. 

At  such  time  as  the  reserve  on  the  insurance  provided  for  an 
employe  is  convertible  to  a  survivorship  annuity  for  the  wife  of  such 
employe  an  amount  equal  to  the  reserve  in  this  fund  to  the  credit  of 
such  employe  shall  be  transferred  to  the  Annuity  Reserve  Fund  and 
placed  to  the  credit  of  such  wife  in  such  fund. 

The  Retirement  Board  shall  determine,  as  of  December  31,  of 
each  year,  the  amount  of  interest  required  to  maintain  the  reserve 
for  such  calendar  year,  and  the  amount  thus  determined  shall  be  trans- 
ferred from  the  Investment  and  Interest  Fund  to  this  fund. 

The  amount  of  any  insurance  provided  by  the  employe,  payable 
otherwise  than  in  annuity,  shall  be  paid  from  this  fund. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  119 

On  December  31  of  each  year,  after  proper  transfer  of  credit 
between  this  fund  and  the  Employer's  Life  Insurance  Fund  has  been 
made,  transfer  of  funds  between  this  fund  and  the  Life  Insurance 
Equalization  Fund  shall  be  made  as  stated  in  Section  16. 

Sickness  and  Accident  Insurance  Fund 

All  sums  paid  by  employer  or  employers  and  employes  to  provide 
for  Sickness  and  Accident  Insurance  as  specified  in  this  Act  shall  be 
paid  into  a  fund  to  be  known  as  the  Sickness  and  Accident  Insurance 
Fund,  and  all  benefits  paid  because  of  such  insurance  shall  be  paid 
from  this  fund. 

Investment  and  Interest  Fund 

All  gains  from  investment  and  all  interest  earnings  shall  be  paid 
into  a  fund  to  be  known  as  the  Investment  and  Interest  Fund.  All 
losses  from  investment  shall  be  charged  to  this  fund.  All  amounts 
due  in  interest  upon  balances  existing  in  the  other  funds,  shall  be 
transferred  from  this  fund  to  such  other  funds. 

Employer's  Supplementary  Fund 

The  employer  shall  pay  annually  into  a  fund  to  be  known  as  the 
Employer's  Supplementary  Fund,  the  amounts  required  under  the  pro- 
visions of  this  Act,  as  stated  in  this  Section  below,  to  provide  supple- 
mentary annuities  and  supplementary  life  insurance  for  present  em- 
ployes as  stated  elsewhere  herein.  Such  payments  shall  be  continued 
until  the  amounts  credited  to  this  fund  shall  be  equal  to  the  liabilities 
of  this  fund,  calculating  annuities  entered  upon  or  prospective  accord- 
ing to  McClintock's  Annuitants'  Table  and  3  per  cent  interest,  male 
or  female,  as  the  case  may  be,  and  life  insurance  liabilities  according 
to  the  American  Experience  Table  of  Mortality  and  3*/2  per  cent 
interest. 

When  the  assets  credited  to  this  fund  are  equal  to  the  liabilities 
as  aforesaid,  then  assets  equal  to  the  amount  of  liabilities  involved 
shall  be  paid  into  other  appropriate  funds  under  the  jurisdiction  of 
the  Retirement  Board  concerned,  and  this  fund  shall  become  dis- 
continued. 

If  there  be  more  than  one  employer  contributing  to  the  Employer's 
Supplementary  Fund,  each  such  employer  shall  pay  annually  such 
proportionate  part  of  the  total  amount  to  be  paid  as  the  sum  of  the 
salaries  of  all  employes  of  such  employer  in  the  group  for  the  pre- 
ceding calendar  year  bears  to  the  total  sum  of  the  salaries  of  the 
employes  of  all  employers  in  the  group  for  said  year. 

All  annuities  payable  to  present  employes  and  widows  of  present 
employes  and  to  prior  annuitants  and  the  widows  of  prior  annuitants 


120  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

in  'addition  to  such  annuities  as  are  payable  from  the  "annuity  reserve 
fund"  or  the  "compensation  fund,"  as  stated  elsewhere  in  this  Act, 
shall  be  paid  from  this  fund. 

The  annual  payments  to  be  made  to  provide  for  supplementary 
annuities  as  required  by  this  Act  for  present  employes  as  denned  in 
Section  3  hereof  shall  be  as  follows : 
(   1 )     To  the  Retirement  Board  of  Group    1, $1,915,000.00 

(2)  To  the  Retirement  Board  of  Group    2, 206,000.00 

(3)  To  the  Retirement  Board  of  Group    3, 832,000.00 

(  4)     To  the  Retirement  Board  of  Group    4, 200,000.00 

(5)     To  the  Retirement  Board  of  Group    5, 143,000.00 

(  6)     To  the  Retirement  Board  of  Group    6, 535,000.00 

(  7)     To  the  Retirement  Board  of  Group    7, 107,000.00 

(  8)     To  the  Retirement  Board  of  Group    8, 625,000.00 

(  9)     To  the  Retirement  Board  of  Group    9, 537,000.00 

(10)  To  the  Retirement  Board  of  Group  10, 250,000.00 

(11)  To  the  Retirement  Board  of  Group  11, 260,000.00 

Section  15.     Treatment  of  Assets  and  Obligations  of  Prior  Exist- 
ing Pension  Funds 
Each  Retirement  Board  shall  determine  as  of  January  1,  1920: 

(a)  The  present  value  of  each  annuity  in  effect  and  payable  in 
accordance  with  the  terms  of  each  Act  superseded  by  this  Act,  which 
pertained  to  the  pension  funds  or  pension  and  retirement  funds  brought 
under  the  jurisdiction  of  such  Retirement  Board  by  this  Act. 

(b)  The  amounts  that  were  contributed  or  shall  have  been  con- 
tributed by  each  present  employe  to  any  pension  funds  or  pension 
and  retirement  funds  brought  under  the  jurisdiction  of  said  Board. 
Each  such  amount  shall  be  improved  at  regular  interest  to  the  date 
when  such  employe  shall  come  under  the  provisions  of  this  Act. 

The  present  values  of  the  annuities  shall  be  determined  accord- 
ing to  McClintock's  Annuitants'  Table  and  3  per  cent  interest,  male 
or  female,  as  the  case  may  be. 

When  Employers  Are  Identical  with  Those  Under  Superseded  Acts 

If  the  employer  or  employers  involved  in  any  group  under  the 
jurisdiction  of  any  Retirement  Board  created  under  the  provisions  of 
this  Act  are  identical  with  the  employer  or  employers  involved  in  any 
pension  fund  or  funds,  or  any  pension  and  retirement  fund  or  funds, 
existing  under  the  provisions  of  an  Act  superseded  by  this  Act,  which 
fund  or  funds  are  brought  under  the  jurisdiction  of  the  Retirement 
Board  created  in  accordance  with  this  Act,  then: 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  121 

1 :  If  the  amounts  that  come  into  possession  of  the  Retirement 
Board  from  such  pension  or  pension  and  retirement  fund  or  funds 
as  existed  under  the  provisions  of  the  superseded  Act  or  Acts  are 
equal  to  or  exceed  the  total  of  the  liabilities  determined  as  stated  under 

(a)  and  (b)  above,  an  amount  equal  to  the  amounts  of  liability  de- 
termined under    (a)    shall  be  paid  into  the  Annuity  Reserve  Fund 
and  credited  in  proper  amounts  to  the  annuitants  of  the  pension  or 
pension  and  retirement  fund  or  funds  which  existed  under  such  super- 
seded Act  or  Acts;  an  amount  equal  to  the  amount  determined  under 

(b)  above  shall  be  paid  into  the  Salary  Deductions  for  Annuity  Fund 
and  credited  in  proper  amounts  to  the  employes  involved  in  the  pen- 
sion or  pension  and  retirement  fund  or  funds  which  existed  under 
such  superseded  Act  or  Acts;  and  the  balance,  if  any,  shall  be  paid 
into  the  Employer's  Supplementary  Fund. 

2:  If  the  amounts  that  come  into  possession  of  the  Retirement 
Board  from  such  pension  or  pension  and  retirement  fund  or  funds 
as  existed  under  the  provisions  of  the  superseded  Act  or  Acts  are 
less  than  an  amount  equal  to  the  total  of  the  amounts  of  liability  as 
determined  under  (a)  and  (b)  above,  then,  if  such  funds  be  greater 
than  the  amounts  of  liability  as  determined  under  (a)  above,  amounts 
equal  to  the  amounts  of  the  liability  as  determined  under  (a)  above 
shall  be  paid  into  the  Annuity  Reserve  Fund  and  credited  in  proper 
amounts  to  the  annuitants  of  the  pension  or  pension  and  retirement 
fund  or  funds  which  existed  under  such  superseded  Act  or  Acts,  and 
the  balance  shall  be  prorated  among  the  present  employes  in  the  Salary 
Deductions  for  Annuity  Fund  according  to  the  amounts  contributed 
by  such  employes  to  the  fund  existing  under  such  superseded  Act 
or  Acts  with  regular  interest  from  the  dates  when  such  contributions 
were  made  to  the  dates  when  such  employes  come  under  the  pro- 
visions of  this  Act. 

3 :  If  the  amounts  that  come  »into  possession  of  the  Retirement 
Board  from  such  pension  or  pension  and  retirement  fund  or  funds' 
as  existed  under  the  provisions  of  the  superseded  Act  or  Acts  are 
less  than  an  amount  equal  to  the  amounts  of  liability  as  determined 
under  (a)  above,  they  shall  be  paid  into  the  Annuity  Reserve  Fund 
and  prorated  to  the  credit  of  the  prior  annuitants  of  such  fund  ac- 
cording to  the  present  values  of  the  annuities  being  paid,  and  the 
employer  shall  pay  into  the  Prior  Annuitants'  Fund  each  year  the 
difference  between  the  amounts  of  annuities  being  paid  to  such  an- 
nuitants and  the  amounts  of  the  annuities  provided  from  the  Annuity 
Reserve  Fund  for  such  annuitants. 


122  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

When  an  annuity  is  granted  on  account  of  a  present  employe, 
there  shall  be  transferred  from  the  Employer's  Supplementary  Fund 
to  the  Annuity  Reserve  Fund  for  the  account  of  such  employe,  an 
amount  equal  to  the  difference  between  the  amount  contributed  to  the 
pension  fund  or  pension  and  retirement  fund  created  by  an  Act  which 
this  Act  supersedes  by  such  employe  with  regular  interest  and  the 
amount  placed  in  the  Salary  Deductions  for  Annuity  Fund  to  the 
account  of  such  employe  on  the  date  when  he  comes  under  the  pro- 
visions of  this  Act,  also  improved  at  regular  interest. 

When  Employes  Are  Not  Identical  With  Those  Under  Superseded 
Acts 

If  the  employer  or  employers  involved  in  any  group  under  the 
jurisdiction  of  any  Retirement  Board  created  under  the  provisions 
of  this  Act  are  not  identical  with  the  employer  or  employers  involved 
in  any  pension  or  pension  and  retirement  fund  or  funds  existing  under 
the  provisions  of  an  Act  superseded  by  this  Act  which  fund  or  funds 
are  brought  under  the  jurisdiction  of  a  Retirement  Board  created  in 
accordance  with  this  Act,  then: 

1 :  If  the  amount  that  comes  into  possession  of  such  Retirement 
Board  from  any  such  pension  or  pension  and  retirement  fund  as 
existed  under  the  provisions  of  the  superseded  Act  is  equal  to  or  ex- 
ceeds the  total  of  the  amounts  of  liabilities  determined  as  stated  under 
(a)  and  (b)  in  this  section  above,  an  amount  equal  to  the  amounts 
of  liability  determined  under  (a)  above  shall  be  paid  into  the  Annuity 
Reserve  Fund  and  credited  in  proper  amounts  to  the  annuitants  of 
the  pension  or  pension  and  retirement  fund  or  funds  which  existed 
under  such  superseded  Act  or  Acts;  an  amount  equal  to  the  amount 
determined  under  (b)  above  shall  be  paid  into  the  Salary  Deductions 
for  Annuity  Fund  and  credited  in  proper  amounts  to  the  employes 
involved  in  the  pension  or  pension  and  retirement  fund  or  funds  which 
existed  under  such  superseded  Act  or  Acts,  and  the  balance,  if  any, 
shall  be  paid  into  the  Employer's  Supplementary  Fund  and  held  in  such 
fund  to  the  credit  of  the  employer  or  employers  involved  in  the  pen- 
sion or  pension  and  retirement  fund  or  funds  which  existed  under 
such  superseded  Act  or  Acts,  with  regular  interest,  to  reduce  the 
amounts  which  such  employer  or  employers  would  otherwise  pay  into 
such  fund. 

2:  If  the  amount  that  comes  into  possession  of  the  Retirement 
Board  from  any  such  pension  or  pension  and  retirement  fund  as  ex- 
isted under  the  provisions  of  the  superseded  Act  is  less  than  an 
amount  equal  to  the  total  of  the  amounts  of  liability  as  determined 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  123 

under  (a)  and  (b)  above,  then,  if  such  funds  be  greater  than  the 
amounts  of  liability  as  determined  under  (a)  above,  an  amount  equal 
to  the  amounts  of  the  liability  as  determined  under  (a)  above  shall 
be  paid  into  the  Annuity  Reserve  Fund  and  credited  in  proper  amounts 
to  the  annuitants  of  the  pension  or  pension  and  retirement  fund  or 
funds  which  existed  under  such  superseded  Act  or  Acts ;  and  the 
balance  shall  be  prorated  among  the  present  employes  in  the  Salary 
Deductions  for  Annuity  Fund  according  to  the  amounts  contributed 
by  such  employes  to  the  fund  which  existed  under  such  superseded 
Act  with  regular  interest  from  the  dates  when  such  contributions  were 
made  to  the  date  when  such  employes  come  under  the  provisions  of 
this  Act. 

3:  If  the  amount  that  comes  into  possession  of  the  Retirement 
Board  from  any  such  pension  or  pension  and  retirement  fund  as 
existed  under  the  provisions  of  the  superseded  Act  are  less  than  an 
amount  equal  to  the  amount  of  liability  as  determined  under  (a)  above, 
such  amount  shall  be  paid  into  the  Annuity  Reserve  Fund  and  pro- 
rated to  the  credit  of  the  annuitants  participating  in  such  pension  or 
pension  and  retirement  fund  according  to  the  present  values  of  the 
annuities  being  paid  from  such  pension  or  pension  and  retirement  fund 
and  the  employer  shall  pay  into  this  fund  each  year  the  difference 
between  the  amount  of  annuity  being  paid  to  all  such  annuitants  and 
the  amounts  of  the  annuities  being  paid  from  the  Annuity  Reserve 
Fund  to  such  annuitants. 

When  an  annuity  is  granted  on  account  of  a  present  employe  of 
any  employer  there  shall  be  transferred  from  the  Employer's  Sup- 
plementary Fund  to  the  Annuity  Reserve  Fund  and  credited  to  such 
employe  in  such  fund  an  amount  equal  to  the  difference  between  the 
amount  contributed  by  such  employe  to  the  pension  or  pension  and 
retirement  fund  created  by  an  Act  which  this  Act  supersedes,  with 
regular  interest,  and  the  amount  placed  in  the  Salary  Deductions  for 
Annuity  Fund  to  the  account  of  such  employe  on  the  date  when  he 
comes  under  the  provisions  of  this  Act,  also  improved  at  regular  in- 
terest. Such  amount  with  regular  interest  shall  be  paid  into  the  Em- 
ployer's Supplementary  Fund  by  the  employer  of  such  employe  during 
the  following  year,  in  addition  to  the  amounts  otherwise  payable  by 
such  employer  during  such  year. 

If  a  prior  annuitant  becomes  ineligible  for  annuity  under  the 
provisions  of  the  Act  under  which  such  annuitant  derived  annuity, 
then  an  amount  equal  to  the  reserve  on  such  annuity  in  the  Annuity 
Reserve  Fund  on  the  date  when  such  ineligibility  for  annuity  occurs 
shall  be  credited  to  the  employer  interested  and  held  with  regular 


124  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

interest  to  reduce  the  amount  which  such  employer  would  otherwise 
pay  under  the  provisions  of  this  Act. 

Section  16.     Equalization  Funds 

The  Retirement  Commission  shall  establish  and  administer  three 
funds  to  be  known  as  the  Refund  Equalization  Fund,  the  Annuity 
Equalization  Fund,  and  the  Life  Insurance  Equalization  Fund,  re- 
spectively. 

Refund  Equalization  Fund 

Each  Retirement  Board  shall  determine,  as  of  December  31  of 
each  year,  the  total  of  all  the  amounts-  deducted  during  the  year  for 
refunds,  accumulated  at  regular  interest  from  the  date  when  such 
deductions  took  effect  to  December  31.  Such  Retirement  Board  shall 
also  determine  the  total  of  all  the  amounts  paid  in  refunds  during 
such  year  with  regular  interest  on  the  amounts  paid  from  the  dates 
of  payment  to  December  31. 

If  the  amount  so  deducted  with  interest  shall  be  in  excess  of  the 
amount  so  paid  with  interest,  an  amount  equal  to  the  balance  shall 
be  paid  by  the  Retirement  Board  in  question  to  the  Retirement  Com- 
mission who  shall  place  the  amount  thus  paid  in  the  Refund  Equal- 
ization Fund.  If  the  total  amount  so  deducted  with  interest  shall  be 
less  than  the  total  amount  so  paid  in  refunds  with  interest,  the  Re- 
tirement Commission  shall  pay  to  the  Retirement  Board  in  question 
from  the  Refund  Equalization  Fund  a  sum  equal  to  such  difference, 
and  such  Retirement  Board  shall  place  the  amount  thus  paid  in  the 
Annuity  Reserve  Fund  of  such  Board. 

Annuity  Equalization  Fund 

Each  Retirement  Board  shall  determine,  as  of  December  31  of 
each  year,  the  reserves,  according  to  the  American  Experience  Table 
of  Mortality  and  4  per  cent  interest,  on  all  annuities  being  paid  by 
the  Board  from  the  Annuity  Reserve  Fund,  and  on  all  prospective 
annuities  to  be  paid  from  such  fund  to  employes  who  are  over  the 
Standard  Age  of  Retirement,  calculating  such  reserves  as  if  such  an- 
nuities were  actually  entered  upon. 

If  the  amount  credited  to  the  Annuity  Reserve  Fund  shall  be  in 
excess  of  the  total  of  the  reserves  so  determined,  an  amount  equal 
to  the  balance  shall  be  paid  by  the  Retirement  Board  in  question  to 
the  Retirement  Commission  who  shall  place  the  amount  so  paid  in 
the  Annuity  Equalization  Fund.  If  the  amount  credited  to  the  An- 
nuity Reserve  Fund  shall  be  less  than  the  total  of  the  reserves  so 
determined,  the  Retirement  Commission  shall  pay  to  the  Retirement 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  125 

Board  in  question  from  the  Annuity  Equalization  Fund  a  sum  equal 
to  such  difference  and  the  Retirement  Board  in  question  shall  pay 
such  amount  to  the  Annuity  Reserve  Fund  of  such  Board. 

Life  Insurance  Equalization  Fund 

Each  Retirement  Board  shall  determine  as  of  December  31  of 
each  year,  the  reserves  on  the  amounts  of  insurance  in  force  in  the 
Employes'  Life  Insurance  Fund  according  to  the  American  Exper- 
ience Table  of  Mortality  and  3*/2  per  cent  interest.  If  the  amount 
credited  to  the  Employes'  Life  Insurance  Fund  shall  be  in  excess  of 
the  liabilities  of  such  fund  including  the  reserves  on  the  amounts  of 
insurance  in  force,  an  amount  equal  to  the  excess  balance  shall  be  paid 
to  the  Retirement  Commission  who  shall  place  the  amount  so  paid  in 
the  Life  Insurance  Equalization  Fund.  If  the  amount  credited  to 
the  Employes'  Life  Insurance  Fund  shall  be  less  than  the  total  of  the 
liabilities  so  determined,  the  Retirement  Commission  shall  pay  to  the 
Retirement  Board  in  question  from  the  Life  Insurance  Equalization 
Fund  a  sum  equal  to  such  difference  and  the  Retirement  Board  in 
question  shall  pay  such  amount  to  the  Employes'  Life  Insurance  Fund 
of  such  Board. 

Provisions  When  Amounts  in  Equalization  Funds  Are  Insufficient 
In  the  event  that  the  funds  to  the  credit  of  any  one  equalization 
fund  should  prove  insufficient  to  meet  the  demands  on  such  fund,  the 
Retirement  Commission  may  borrow  from  any  other  equalization  fund 
to  meet  such  demands,  and  the  amount  thus  borrowed  shall  be  held 
at  regular  interest  until  repaid. 

In  the  event  that  all  three  equalization  funds  should  prove  in- 
sufficient to  meet  the  demands  upon  them,  the  Retirement  Commis- 
sion shall  have  power  to  issue  anticipation  warrants  against  future 
receipts,  subject  to  regular  interest,  which  warrants  shall  be  prorated 
among  all  the  Retirement  Boards,  according  to  the  total  of  the  accu- 
mulations for  both  Old  Age  Retirement  Annuity  and  Life  Insurance 
held  by  each  Retirement  Board  on  January  1  of  the  year  in  which 
such  insufficiency  of  funds  occurs.  Such  warrants  shall  be  accepted 
and  paid  for  at  their  face  value  by  such  Retirement  Boards  and  shall 
be  held  until  redeemed  as  investments  within  the  provisions  of  this  Act. 

Provisions  When  Surplus  Exists  in  Equalization  Funds 

If  at  any  time  the  amount  in  the  Refund  Equalization  Fund 
should  exceed  10  per  cent  of  the  reserve  held  in  all  the  annuity  reserve 
funds  of  all  Retirement  Boards,  or  if  at  any  time  the  amount  held  in 
the  Annuity  Equalization  Fund  together  with  an  amount  equal  to 


126  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

the  amount  of  the  reserves  held  in  all  the  Annuity  Reserve  Funds 
of  all  the  Retirement  Boards  should  exceed  the  amount  of  the  reserve 
required  under  McClintock's  Annuitants'  Table,  male  or  female  as 
the  case  may  be,  with  3  per  cent  interest,  for  all  annuities  being  paid 
out  of  the  Annuity  Reserve  Funds  of  all  the  Retirement  Boards,  and 
all  prospective  annuities  to  be  paid  from  such  funds  to  all  employes 
who  are  over  the  Standard  Age  of  Retirement,  together  with  an 
amount  equal  to  any  amounts  of  liability  because  of  Old  Age  Retire- 
ment Annuities  existing  in  the  Employer's  Supplementary  Funds  of 
all  the  Retirement  Boards;  or  if  at  any  time  an  amount  equal  to  20 
per  cent  of  the  amount  of  reserve  carried  for  Life  Insurance  in  all 
the  Life  Insurance  Funds  of  all  the  Retirement  Boards,  together  with 
an  amount  equal  to  any  amounts  of  liability  because  of  Life  Insurance 
existing  in  such  Employer's  Supplementary  Funds  of  all  the  Retire- 
ment Boards,,  the  excess  shall  be  prorated  among  the  Retirement 
Boards  according  to  the  amounts  each  Retirement  Board  paid  into 
such  fund  less  the  amounts  which  such  Board  withdrew  from  such 
funds  with  regular  interest  to  the  date  when  distribution  is  made. 
Each  Retirement  Board  shall  place  such  amounts  when  received  in 
the  Investment  and  Interest  Fund. 

OLD  AGE  RETIREMENT  ANNUITY 
Section  17.     Amount  of  Annuity 

The  Old  Age  Retirement  Annuity  of  an  employe  shall  be  equal 
to  fifty  per  cent  of  the  highest  salary  of  the  employe,  in  case  the 
employe  be  a  policeman  or  a  fireman,  or  forty  per  cent  of  such  sal- 
ary if  the  employe  be  other  than  a  policeman  or  a  fireman,  except 
that  if  the  contributions  necessary  to  provide  such  annuity  should 
exceed  the  maximum  contributions  for  annuity  specified  herein,  then 
the  amount  to  be  contributed  shall  be  the  maximum  permitted  and 
the  annuity  shall  be  for  such  an  amount  as  can  be  provided  from  the 
accumulations  of  the  contributions  thus  made  by  and  on  behalf  of 
such  employe. 

Section  18.     Ratio   of   Contributions   as   Between   Employer   and 

Employe 

To  provide  for  the  Old  Age  Retirement  Annuity  described  in 
Section  17,  both  employer  and  employe  shall  contribute.  The  em- 
ployer shall  contribute  with  the  employe  for  each  service  year  of 
the  employe  in  the  ratio  of  three  to  one  in  case  the  employe  be  a 
policeman  or  a  fireman,  and  in  the  ratio  of  two  to  one  in  case  the 
employe  be  other  than  a  policeman  or  a  fireman.  This  ratio  as  be- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  127 

tween  employer  and  employe  shall  be  maintained  with  respect  to  all 
contributions  of  a  future  entrant  and  with  respect  to  all  contributions 
of  a  present  employe  except  as  modified  by  the  provisions  of  Sections 
22  and  23. 

In  determining  the  amounts  to  be  paid  by  the  employer  on  behalf 
of  each  employe  in  conformity  with  these  ratios,  the  contribution 
made  by  each  employe  during  a  service  year  shall  be  accumulated  at 
regular  interest  to  the  end  of  such  year,  and  the  employer  shall  con- 
tribute amounts  bearing  to  the  total  of  such  accumulated  amounts, 
the  ratio  stated,  reckoning  regular  interest  between  the  end  of  such 
service  year  and  the  dates  when  payments  by  the  employer  are  made. 

Section  19.     Limitation  in  Contributions  of  Employe  for  Old  Age 
Retirement  Annuity 

Contributions  of  an  employe  for  Old  Age  Retirement  Annuity 
during  any  service  year  of  such  employe  shall  not  be  required  in 
greater  amount  than  4  per  cent  of  each  periodical  payment  of  salary 
during  such  year  including  the  amounts  required  to  provide  refunds 
as  stated  elsewhere  in  this  Act. 

Section  20.     Plan  of  Accumulation  for  Old  Age  Retirement  An- 
nuity 

Subject  to  the  limitations  in  contributions  imposed  in  this  Act, 
the  contributions  of  each  employer  and  each  future  entrant  for  Old 
Age  Retirement  Annuity  during  each  succeeding  service  year  of  such 
future  entrant  shall  be  of  such  an  amount  that  if  an  equal  amount 
be  contributed  during  each  of  the  remaining  years  of  service  of  the 
employe  to  the  date  when  he  attains  the  Standard  Age  of  Retirement, 
the  total  contributions  during  all  service  years  of  such  future  entrant 
accumulated  at  regular  interest  to  the  date  when  he  attains  the  Stand- 
ard Age  of  Retirement,  will  be  sufficient  to  provide  an  annuity  begin- 
ning at  the  Standard  Age  of  Retirement,  according  to  the  American 
Experience  Table  of  Mortality  and  4  per  cent  interest,  equal  to  fifty 
per  cent  of  the  highest  salary  received  by  such  employe  during  any 
service  year  of  such  employe,  including  the  year  then  current,  in  the 
case  of  a  policeman  or  a  fireman,  or  forty  per  cent  of  the  highest 
salary  received  by  such  employe  during  any  service  year  of  such 
employe,  including  the  year  then  current,  in  case  the  employe  is  other 
than  a  policeman  or  a  fireman.  Provided,  however,  that  if  such  future 
entrant  enters  the  service  at  an  age  which  will  permit  of  a  greater 
period  of  service  than  twenty-five  years  before  his  attainment  of  the 
Standard  Age  of  Retirement,  the  contributions  of  such  employer  and 


128  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

such  employe  during  each  succeeding  service  year  of  the  first  twenty- 
five  years  of  service  shall  be  such  that  if  an  equal  amount  be  con- 
tributed during  each  of  the  remaining  years  of  the  twenty-five  years, 
the  total  contributions  made  during  the  first  twenty-five  years  of  ser- 
vice accumulated  to  the  date  when  such  employe  attains  the  Standard 
Age  of  Retirement  at  regular  interest,  will  be  sufficient  to  provide 
an  annuity  beginning  at  the  Standard  Age  of  Retirement  according 
to  the  foregoing  standard,  equal  to  fifty  per  cent  of  the  salary  as 
hereinbefore  stated  in  the  case  of  a  policeman  or  a  fireman  or  forty 
per  cent  of  the  salary  as  hereinbefore  stated  in  case  the  employe  is 
other  than  a  policeman  or  a  fireman. 

Section  21.     Provisions  for  Contributions  After  Twenty-five  Years 

of  Service 

If  a  future  entrant  enters  the  service  at  an  age  which  will  permit 
of  a  greater  period  of  service  than  twenty-five  years  before  his  attain- 
ment of  the  Standard  Age  of  Retirement  and  by  reason  of  the  limita- 
tion in  contributions  for  Old  Age  Retirement  Annuity  imposed  in 
this  Act  or  for  any  other  reason  the  accumulation  to  the  credit  of 
such  employe  at  any  time  after  he  has  completed  twenty-five  years 
of  service  are  insufficient  to  provide  the  annuity  prescribed  in  this 
Act  according  to  the  plan  of  accumulation  stated  in  Section  20,  such 
employe  and  his  employer  shall  contribute  the  limiting  percentages  of 
salary  prescribed  herein  until  such  time  as  the  amount  accumulated 
to  provide  annuity  for  such  employe  when  improved  at  regular  in- 
terest to  the  date  when  he  attains  the  Standard  Age  of  Retirement 
shall  be  sufficient  to  provide  the  prescribed  annuity.  No  such  con- 
tributions, however,  shall  be  made  on  account  of  any  future  entrant 
after  he  shall  have  attained  the  Standard  Age  of  Retirement. 

Section  22.     Supplementary  Annuities  of  Present  Employes 

The  Retirement  Board,  subject  to  the  approval  of  the  Retire- 
ment Commission,  shall  determine  as  of  the  date  when  an  employe 
comes  under  the  provisions  of  this  Act,  the  amount  that  would  have 
been  to  the  credit  of  such  employe  for  Old  Age  Retirement  Annuity 
from  contributions  of  the  employer  if  the  employer  had  been  con- 
tributing for  old  age  retirement  annuity  for  the  employe  as  if  the 
employe  had  been  under  the  provisions  of  this  Act  from  the  begin- 
ning of  his  service,  except  that  in  making  such  determination,  it  shall 
be  assumed  that: 

1 :  The  salary  of  the  employe  was  the  same  during  his  entire 
period  of  prior  service  as  upon  the  date  when  he  comes  under  the 
provisions  of  this  Act. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  129 

2:  The  period  of  service  of  the  employe  shall  be  equal  to  the 
entire  period  of  service  which  the  employe  gave  to  any  employer  as 
defined  in  this  Act,  up  to  the  date  when  he  comes  under  the  provisions 
of  this  Act,  including  any  service  rendered  after  his  attainment  of 
the  Standard  Age  of  Retirement,  and  any  period  of  time  allowed  as 
service  under  the  provisions  of  any  Act  superseded  by  this  Act  gov- 
erning and  relating  to  a  pension  or  pension  and  retirement  fund  in 
which  such  employe  is  a  participant  or  beneficiary  at  the  time  when 
he  comes  under  the  provisions  of  this  Act. 

An  amount  equal  to  the  amount  determined  under  the  foregoing 
provisions  of  this  section  shall  be  used  to  provide  a  supplementary 
annuity  for  the  employe  or  for  anyone  deriving  annuity  through  him 
under  the  same  conditions  as  govern  payment  of  annuity  to  future 
entrants  and  those  deriving  annuity  through  them,  except  that  pay- 
ment of  such  annuities  shall  be  made  from  the  Employers'  Supple- 
mentary Fund,  and  also  except  that  if  the  employe  be  over  the 
Standard  Age  of  Retirement  on  the  date  when  he  comes  under  the 
provisions  of  this  Act,  the  amount  of  annuity  shall  be  determined  on 
the  assumption  that  the  age  of  the  employe  is  the  Standard  .Age  of 
Retirement. 

Section  23.  Contributions  on  Behalf  of  and  by  Present  Employes 
After  the  Dates  When  They  Come  Under  the  Provisions 
of  This  Act  and  Amounts  of  Annuities  Available  on  Ac- 
count of  Service  Rendered  After  Such  Dates 

If  a  present  employe  be  under  the  Standard  Age  of  Retirement 
on  the  date  when  he  comes  under  the  provisions  of  this  Act,  the  em- 
ployer shall  contribute  during  each  service  year  of  the  employe  after 
he  comes  under  the  provisions  of  this  Act  until  he  attains  the  Standard 
Age  of  Retirement,  subject  to  the  limitation  on  contributions  by  the 
employer  as  specified  herein,  amounts  sufficient  to  provide  an  annuity 
of  three-fourths  of  fifty  per  cent  of>  salary  if  the  employe  be  a  police- 
man or  a  fireman  or  an  annuity  of  two-thirds  of  forty  per  cent  of 
salary  if  the  employe  be  other  than  a  policeman  or  a  fireman,  dimin- 
ished by  the  amount  of  supplementary  annuity  which  can  be  provided 
from  an  amount  equal  to  the  amount  determined  as  a  credit  of  such 
employe  on  the  date  when  he  comes  under  the  provisions  of  this  Act, 
improved  at  regular  interest  to  the  date  when  the  employe  enters  upon 
annuity  or  attains  the  Standard  Age  of  Retirement,  whichever  event 
shall  first  occur,  according  to  the  standard  specified  for  future  entrants. 

A  present  employe  shall  receive  credit  for  the  amount  of  all 
contributions  made  by  him  to  any  pension  or  pension  and  retirement 


130  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

fund  created  by  an  Act  which  this  Act  supersedes,  with  regular  in- 
terest accumulated  to  the  date  when  he  comes  under  the  provisions 
of  this  Act. 

If  a  present  employe  be  under  the  Standard  Age  of  Retirement 
on  the  date  when  he  comes  under  the  provisions  of  this  Act,  he  shall 
contribute,  beginning  on  such  date,  as  of  his  attained  age  on  such  date, 
according  to  the  plan  of  accumulation  stated  in  Section  20,  in  such 
yearly  amounts  as  will,  when  taken  with  the  amount  to  his  credit  as 
defined  in  the  last  preceding  paragraph  hereof,  all  accumulated  at 
regular  interest,  be  sufficient  to  provide  one  fourth  of  the  annuity 
specified  in  Section  17,  if  he  be  a  policeman  or  a  fireman,  or  one  third 
of  such  annuity  if  he  be  an  employe  other  than  a  policeman  or  a  fire- 
man, except  that  no  such  contributions  shall  exceed  the  limitation  in 
contributions  stated  in  Section  19. 

When  by  reason  of  the  limitations  in  contributions  imposed  herein, 
the  accumulations  to  the  credit  of  such  employe  on  the  date  when  he 
attains  the  Standard  Age  of  Retirement  are  not  sufficient  to.  provide 
the  annuity  stated  in  the  preceding  paragraph,  if  such  employe  re- 
mains in  service,  he  shall  continue  to  contribute  the  limiting  percentage 
of  salary  stated  in  Section  19  until  the  accumulation  from  his  contri- 
butions on  the  date  when  he  attained  the  Standard  Age  of  Retirement 
together  with  the  present  value  as  of  the  date  when  he  attained  the 
Standard  Age  of  Retirement,  of  his  contributions  made  subsequent 
to  his  attainment  of  such  age  are  sufficient  to  provide  such  annuity 
as  of  such  age.  The  total  of  the  present  values,  as  of  the  date  when 
such  employe  attained  the  Standard  Age  of  Retirement,  of  the  amounts 
contributed  by  such  employe  towards  Old  Age  Retirement  Annuity 
after  he  shall  have  attained  the  Standard  Age  of  Retirement  shall  be 
used  to  provide  such  employe  with  an  annuity  in  addition  to  that 
provided  for  him  when  he  attained  the  Standard  Age  of  Retirement, 
according  to  the  American  Experience  Table  of  Mortality  and  4  per 
cent  interest  on  the  assumption  that  the  age  of  the  employe  is  the 
Standard  Age  of  Retirement. 

If  the  employe  be  of  or  over  the  Standard  Age  of  Retirement  on 
the  date  when  he  comes  under  the  provisions  of  this  Act,  and  the 
accumulations  to  his  credit  on  such  date  are  not.  sufficient  to  provide 
the  annuity  stated  hereinbefore  in  this  section,  he  shall  continue  to 
contribute  the  limiting  percentage  of  salary  stated  in  Section  19,  if 
he  continues  in  service,  until  the  accumulation  from  his  contributions 
on  the  date  when  he  comes  under  the  provisions  of  this  Act,  together 
with  the  present  value  as  of  the  date  when  he  comes  under  the  pro- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  131 

visions  of  this  Act  of  his  contributions  made  subsequent  to  such  date, 
are  sufficient  to  provide  such  annuity  as  of  the  Standard  Age  of  Re- 
tirement. The  present  value,  as  of  the  date  when  the  employe  comes 
under  the  provisions  of  this  Act,  of  the  total  of  the  amounts  con- 
tributed by  the  employe  towards  Old  Age  Retirement  Annuity  after 
he  comes  under  the  provisions  of  this  Act  shall  be  used  to  provide 
the  employe  with  an  annuity  in  addition  to  that  provided  for  him 
when  he  comes  under  the  provisions  of  this  Act,  according  to  the 
American  Experience  Table  of  Mortality  and  4  per  cent  interest  on 
the  assumption  that  the  age  of  the  employe  is  the  Standard  Age  of 
Retirement. 

Section  24.  Annuity  Privileges  in  Case  of  Withdrawal  from  Ser- 
vice After  at  Least  Ten  Years  of  Service  Before  Attainment 
of  the  Minimum  Age  of  Retirement 

An  employe  who  withdraws  from  service  after  at  least  ten  years 
of  service  and  before  attainment  of  the  Minimum  Age  of  Retirement 
will,  if  he  shall  not  have  availed  himself  of  the  refund  privilege 
stated  in  Section  54,  become  entitled  to  annuity  beginning  at  the  Min- 
imum Age  of  Retirement  or  at  any  later  date. 

The  amount  of  such  annuity  shall  be  that  which  can  be  pro- 
vided from  the  total  of  the  accumulations  derived  as  stated  herein- 
after, according  to  the  American  Experience  Table  of  Mortality  and 
3^2  per  cent  interest  at  the  attained  age  of  the  employe  on  the  date 
when  his  entire  period  of  service  is  measured  exactly  in  years  at  or 
next  preceding  the  date  when  he  enters  upon  his  annuity,  except  that 
the  amount  of  such  annuity  shall  not  in  any  case  be  in  excess  of  the 
amount  to  which  such  employe  shall  be  entitled  upon  attainment  of 
the  Standard  Age  of  Retirement. 

First:  The  accumulation  from  deductions  from  salary  of  the  em- 
ploye for  Old  Age  Retirement  Annuity  on  the  date  of  his  withdrawal 
from  service  together  with,  if  he  be  a  present  employe,  the  accumu- 
lation on  the  date  of  his  withdrawal  from  service  of  an  amount  equal 
to  the  amount,  if  any,  to  the  credit  of  such  employe,  when  he  comes 
under  the  provisions  of  this  Act,  because  of  contributions  to  any 
pension  or  pension  and  retirement  fund  created  by  an  Act  which  this 
Act  supersedes,  improved  at  3^2  per  cent  interest  from  the  date  when 
he  withdraws  from  service  to  the  date  when  he  enters  upon  his  annuity 
or  attains  the  Standard  Age  of  Retirement,  whichever  event  shall 
first  occur. 

Second:  One  tenth  of  the  accumulation  on  the  date  of  his  with- 
drawal from  service  of  the  contributions  made  by  the  employer  on 


132  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

his  behalf,  together  with,  if  he  be  a  present  employe,  one  tenth  the 
accumulation,  on  the  date  of  his  withdrawal  from  service,  of  an  amount 
equal  to  the  amount  to  the  credit  of  such  employe  when  he  comes  under 
the  provisions  of  this  Act  to  provide  the  supplementary  annuity  pro- 
vided by  the  employer,  for  each  complete  year  of  service  rendered  in 
addition  to  ten  complete  years  of  service  up  to  one  hundred  per  cent 
of  such  accumulation  or  accumulations,  improved  at  3l/2  per  cent  in- 
terest from  the  date  when  he  withdraws  from  service  to  the  date  when 
he  enters  upon  his  annuity  or  attains  the  Standard  Age  of  Retirement, 
whichever  event  shall  first  occur. 

Section  25.  Annuity  Privilege  in  Case  of  Withdrawal  from  Ser- 
vice, After  at  Least  Ten  Years  of  Service,  Upon  or  After 
Attainment  of  the  Minimum  Age  of  Retirement,  and  Before 
Attainment  of  the  Standard  Age  of  Retirement 

An  employe  who  withdraws  from  service,  after  at  least  ten  years 
of  service,  upon  or  after  attainment  of  the  Minimum  Age  of  Retire- 
ment, and  before  attainment  of  the  Standard  Age  of  Retirement, 
shall  be  entitled  to  an  annuity  which  he  may  enter  upon  immediately 
or  at  a  later  date.  The  amount  of  such  annuity  shall  be  that  which 
can  be  provided  from  the  total  of  the  accumulations  derived  as 
stated  hereinafter,  according  to  the  American  Experience  Table  of 
Mortality  and  4  per  cent  interest  at  his  attained  age  on  the  date  when 
his  entire  period  of  service  is  measured  exactly  in  years  at  or  next 
preceding  the  date  when  he  enters  upon  his  annuity,  except  that  the 
amount  of  such  annuity  shall  not  in  any  case  be  in  excess  of  the 
amount  to  which  such  employe  shall  be  entitled  upon  attainment  of 
the  Standard  Age  of  Retirement. 

First :  The  accumulation  from  contributions  of  the  employe  for 
Old  Age  Retirement  Annuity  on  the  date  of  his  withdrawal  from 
service,  together  with,  if  he  be  a  present  employe,  the  accumulation, 
on  the  date  of  his  withdrawal  from  service,  of  an  amount  equal  to 
the  amount,  if  any,  to  the  credit  of  such  employe  when  he  comes 
under  the  provisions  of  this  Act  because  of  contributions  to  any  pen- 
sion or  pension  and  retirement  fund  created  by  an  Act  which  this  Act 
supersedes,  improved  at  regular  interest  to  the  date  when  he  enters 
upon  his  annuity  or  attains  the  Standard  Age  of  Retirement,  which- 
ever event  shall  first  occur. 

Second:  One  tenth  of  the  accumulation  on  the  date  of  his  with- 
drawal from  service  of  the  contributions  made  by  the  employer  on 
his  behalf  for  old  age  retirement  annuity,  together  with,  if  he  be  a 
present  employe,  one-tenth  of  the  accumulation  on  the  date  of  his 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  133 

withdrawal  from  service  of  an  amount  equal  to  the  amount  to  the 
credit  of  such  employe  when  he  comes  under  the  provisions  of  this 
Act  to  provide  the  supplementary  annuity  provided  by  the  employer, 
for  each  complete  year  of  service  rendered  in  addition  to  ten  com- 
plete years  of  service  up  to  one  hundred  per  cent  of  such  accumula- 
tion, improved  at  regular  interest  from  the  date  when  he  withdraws 
from  service  to  the  date  when  he  enters  upon  his  annuity  or  attains 
the  Standard  Age  of  Retirement,  whichever  event  shall  first  occur. 

Section  26.  Annuity  Privilege  of  a  Future  Entrant,  or  of  a  Present 
Employe,  Upon  Withdrawal  from  Service  Upon  or  After 
Attainment  of  the  Standard  Age  of  Retirement. 

A  future  entrant,  upon  withdrawal  from  service  upon  or  after 
attainment  of  the  Standard  Age  of  Retirement  after  at  least  ten  years 
of  service  rendered  before  his  attainment  of  the  Standard  Age  of 
Retirement,  or  a  present  employe  who  is  under  the  Standard  Age 
of  Retirement  on  the  date  when  he  comes  under  the  provisions  of 
this  Act,  upon  withdrawal  from  service  upon  or  after  attainment  of 
the  Standard  Age  of  Retirement,  shall  be  entitled  to  enter  upon  an 
annuity  immediately.  The  amount  of  such  annuity  shall  be  that 
which  can  be  provided,  according  to  the  American  Experience  Table 
of  Mortality  and  4  per  cent  interest  at  the  Standard  Age  of  Retire- 
ment from  the  total  of  the  accumulations  derived  as  follows: 

First :  The  accumulation  from  his  own  deductions  in  salary  on 
the  date  when  he  attained  the  Standard  Age  of  Retirement,  including, 
in  the  case  of  a  present  employe,  the  total  of  the  present  values  as 
of  the  date  when  he  attains  the  Standard  Age  of  Retirement  of  the 
deductions  from  salary  of  the  employe  for  Old  Age  Retirement  An- 
nuity made  subsequent  to  his  attainment  of  such  age;  together  with, 
if  he  be  a  present  employe,  the  accumulation,  on  the  date  when  he 
attains  the  Standard  Age  of  Retirement,  of  an  amount  equal  to  the 
amount,  if  any,  to  the  credit  of  such  employe  when  he  comes  under 
the  provisions  of  this  Act  because  of  contributions  to  any  pension 
or  pension  and  retirement  fund  created  by  an  Act  which  this  Act 
supersedes. 

Second:  One  tenth  of  the  accumulation  on  the  date  when  he  at- 
tains the  Standard  Age  of  Retirement  of  the  contributions  made  by 
the  employer  on  his  behalf  for  Old  Age  Retirement  Annuity,  together 
with,  if  he  be  a  present  employe,  one  tenth  of  the  accumulation  on 
the  date  when  he  attains  the  Standard  Age  of  Retirement,  of  an  amount 
equal  to  the  amount,  to  the  credit  of  such  employe  when  he  comes 
under  the  provisions  of  this  Act  to  provide  the  supplementary  annuity 


N 

134  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

provided  by  the  employer  for  such  employe,  for  each  complete  year 
of  service  rendered  in  addition  to  ten  complete  years  of  service  up  to 
one  hundred  per  cent  of  such  accumulation. 

Section  27.  Annuity  Privilege,  Upon  Withdrawal  from  Service, 
of  a  Present  Employe,  Who  Is  of  the  Standard  Age  of  Re- 
tirement or  Older  on  the  Date  When  He  Comes  Under  the 
Provisions  of  This  Act 

A  present  employe  who  is  of  the  Standard  Age  of  Retirement 
or  older  on  the  date  when  he  comes  under  the  provisions  of  this  Act 
shall  be  entitled  to  enter  upon  annuity  immediately  upon  withdrawal 
from  service.  The  amount  of  such  annuity  shall  be  that  which  can 
be  provided  from  the  total  of  the  accumulations  derived  as  stated 
hereinafter,  according  to  the  American  Experience  Table  of  Mortality 
and  4  per  cent  interest  on  the  assumption  that  the  age  of  the  employe 
is  the  Standard  Age  of  Retirement. 

First:  The  total  of  the  present  values  as  of  the  date  when  he 
comes  under  the  provisions  of  this  Act  of  the  deductions  from  salary 
of  the  employe  for  Old  Age  Retirement  Annuity,  together  with  the 
accumulation  as  of  the  date  when  he  comes  under  the  provisions  of 
this  Act  of  an  amount  equal  to  the  amount,  if  any,  to  the  credit  of 
such  employe  when  he  comes  under  the  provisions  of  this  Act  be- 
cause of  contributions  to  any  pension  or  pension  and  retirement  fund 
created  by  an  Act  which  this  Act  supersedes. 

Second:  One  tenth  of  the  accumulation  on  the  date  when  he 
comes  under  the  provisions  of  this  Act  of  the  contributions  made  by 
an  employer  on  his  behalf  for  old  age  retirement  annuity,  together 
with  one  tenth  of  the  accumulation  on  the  date  when  he  comes  under 
the  provisions  of  this  Act  to  provide  the  supplementary  annuity  pro- 
vided by  the  employer  for  such  employe  for  each  complete  year  of 
service  rendered  in  addition  to  ten  complete  years  of  service  up  to 
one  hundred  per  cent  of  such  accumulation. 

Section  28.  Modification  of  Provisions  of  This  Plan  Affecting 
Present  Employes 

The  amount  of  annuity  for  a  present  employe  shall  be  that  which 
can  be  provided  from  the  contributions  made  by  such  employe  and 
the  employer  accumulated  according  to  the  provisions  of  this  Act, 
provided,  however,  that  if  the  employe  was  a.  participant  in  or  bene- 
ficiary of  any  pension  fund  or  pension  and  retirement  fund  created 
by  any  Act  which  this  Act  supersedes  and  was  or  shall  have  been  in 
service  upon  attainment  of  the  Minimum  Age  of  Retirement,  such 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  135 


annuity  shall  not  be  less  than  that  provided  for  an  employe  under 
the  provisions  of  said  Act  which  this  Act  supersedes,  whose  rank, 
or  position,  is  that  of  such  employe  on  the  date  when  this  Act  takes 
effect,  and  provided,  further,  that  if  such  employe  has  a  wife  who 
would  have  been  eligible  for  annuity  under  the  provisions  of  said 
superseded  Act  had  said  Act  remained  in  effect,  and  such  employe  be 
under  the  Standard  Age  of  Retirement  when  he  retires  on  annuity, 
there  shall  be  deducted  from  the  annuity  otherwise  to  be  paid  to  such 
employe,  until  such  employe  attains  the  Standard  Age  of  Retirement, 
the  contributions  required  under  this  Act  from  employer  and  employe 
for  life  insurance  for  such  employe. 

Any  present  employe  who  is  or  shall  be  a  participant  in  or  bene- 
ficiary of  a  pension  fund  or  pension  and  retirement  fund  created  under 
and  by  virtue  of  any  Act  or  Acts  superseded  by  this  Act,  the  affairs 
of  which  are  brought  -under  the  jurisdiction  of  any  Retirement  Board 
created  under  the  provisions  of  this  Act,  and  who  is  not  qualified  to 
retire  upon  Old  Age  Retirement  Annuity  when  fifty  (50)  years  of 
age  under  any  other  provision  of  this  Act  shall  have  the  right  to  retire 
from  service  when  fifty  or  more  years  of  age  and  to  receive  there- 
after an  old  age  retirement  annuity  of  an  amount  equal  to  forty  per 
cent  (40%)  of  the  final  salary  of  such  employe,  but  not  in  excess  of 
four  hundred  (400)  dollars  a  year,  provided  such  employe  shall  have 
completed  the  term  of  service  required  for  retirement  on  account  of 
length  of  service  under  the  terms  of  the  superseded  Act  or  Acts  re- 
lating to  such  employe.  This  right  shall  not  be  construed  so  as  to 
conflict  with  or  defeat  any  right  of  such  employe  under  any  other 
provisions  of  this  Act  to  annuity  in  excess  of  four  hundred  (400) 
dollars  a  year. 

LIFE  INSURANCE 

Section  29.     Amount  of  Life  Insurance  to  Be  Provided 

\ 

The  amount  of  life  insurance  herein  provided  for  an  employe 
luring  any  service  year  of  such  employe  shall  be  equal  to  one  and 
three  quarters  of  the  amount  of  salary  received  by  such  employe  dur- 
ing such  year,  in  the  case  of  a  policeman  or  a  fireman,  or  one  and  one 
quarter  of  the  amount  of  salary  of  such  year,  in  the  case  of  an  employe 
who  is  other  than  a  policeman  or  a  fireman,  except  that: 

(1)  If  the  contributions  necessary  to  provide  such  amount  of 
insurance  would  exceed  the  maximum  contributions  required  from  an 
employer  or  an  employe,  as  stated  in  Section  33,  then  the  amounts  to 
be  contributed  shall  be  the  maximum  therein  stated  and  the  amount 
10 


136  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

of  insurance  shall  be  such  as  can  be  provided  by  the  contributions 
thus  made  by  and  on  behalf  of  such  employe. 

(2)  If  the  employe  be  a  future  entrant,  or  if  he  be  a  present  em- 
ploye who  has  been  in  service  for  less  than  5  years  when  he  comes 
under  the  provisions  of  this  Act,  he  shall  submit  himself  for  such 
Medical  Examination  as  may  be  prescribed  by  the  Retirement  Board 
and  if  he  fails  to  submit  himself  for  such  examination  or  fails  to  pass 
such  examination  he  shall  be  insured  for  an  amount  equal  to  20  per 
cent  of  the  amount  stated  above  for  each  full  year  of  service  until 
he  passes  such  examination  or  has  been  in  service  for  five  years. 
Thereafter  he  shall  be  insured  for  the  amount  above  stated. 

(3)  If  the  employe  be  a  female,  or  an  employe  whose  salary  is 
other  than  an  annual  basis,  life  insurance  shall  be  optional  with  such 
employe.     If  such  employe  elects  to  become  insured,  the  amount  of 
such  insurance  shall  be  that  which  such  employe  elects,  provided  that, 
such  amount  shall  not  be  in  excess  of  the  amounts  hereinbefore  pre- 
scribed in  this  section. 

(4)  Subject  to  the  limitation  upon  contributions  for  life  insur- 
ance contained  herein,  the  amount  of'  life  insurance  which  an  employe 
shall  carry  shall  not  be  decreased  if  the  salary  of  the  employe  shall 
become  decreased. 

Section  30.     Ratio    of    Contributions    as   Between   Employer   and 
Employe 

To  provide  for  the  insurance  described  in  Section  29,  employer 
and  employe  shall  contribute  in  equal  amounts  during  any  service  year. 
Such  contributions  of  the  employer  shall  be  made  with  all  contribu- 
tions of  a  future  entrant,  and  with  all  contributions  of  a  present  em- 
ploye except  as  modified  by  the  provisions  of  Section  32. 

In  determining  the  amounts  to  be  paid  by  the  employer  on  behalf 
of  each  employe,  the  contributions  made  by  each  employe  during  a 
service  year  shall  be  accumulated  at  regular  interest  to  the  end  of 
such  year  and  the  employer  shall  contribute  amounts  equal  to  those 
contributed  by  such  employes,  reckoning  regular  interest  between  the 
end  of  such  service  year  and  the  dates  when  payments  by  the  employer 
are  made. 

The  reserve  on  such  insurance  according  to  the  American  Ex- 
perience Table  of  Mortality  and  3*/2  per  cent  interest  shall  be  set  aside 
to  the  credit  of  the  employe  to  be  available  for  providing  the  benefits 
specified  under  the  provisions  contained  in  this  Act. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  137 

Section  31.     Plan  of  Premium  Payment  for  a  Future  Entrant 

Subject  to  the  limitations  upon  contributions  stated  in  Section  33, 
contributions  toward  life  insurance  during  any  service  year  of  a  future 
entrant  shall  be  on  the  basis  of  the  net  level  annual  premiums  re- 
quired under  limited  payment  life  insurance,  sufficient  to  render  in- 
surance of  the  amount  specified,  payable  at  death,  paid  up  when  the 
employe  attains  the  Standard  Age  of  Retirement,  according  to  the 
American  Experience  Table  of  Mortality  and  2>l/2  per  cent  interest. 

Section  32.     Life  Insurance  of  Present  Employes 

The  Retirement  Board  shall  determine  the  amount  of  reserve 
according  to  the  American  Experience  Table  of  Mortality  and  3^ 
per  cent  interest  which  would  have  been  accumulated,  under  the  plan 
of  premium  payment  stated  in  Section  31  for  a  future  entrant,  to 
the  credit  of  each  present  employe  on  the  date  when  he  comes  under 
the  provisions  of  this  Act,  for.  insurance  of  an  amount  equal  to  one 
half  the  amount  stated  in  Section  29,  under  the  following  assumptions, 
but  subject  to  the  limitation  upon  contributions  stated  in  Section  33: 

(1)  That  he  was  under  the  provisions  of  this  Act  during  his 
entire  term  of  service. 

(2)  That  his  salary  during  his  entire  period  of  prior  service  was 
the  same  as  on  the  date  when  he  comes  under  the  provisions  of  this 
Act. 

(3)  That  his  period  of  service  is  the  entire  period  of  service  up 
to  the  date  when  he  comes  under  the  provisions  of  this  Act  including 
any  service  rendered  after  his  attainment  of  the  Standard  Age  of 
Retirement. 

(4)  That  if  he  be  over  the  Standard  Age  of  Retirement  on  the 
date  when  he  comes  under  the  provisions  of  this  Act,  computations 
shall  be  made  as  if  his  age  were  the  Standard  Age  of  Retirement  on 

such  date. 

i 

An  amount  equal  to  the  amount  thus  determined  shall  be  applied 
as  a  net  single  premium  at  the  attained  age  of  the  employe  to  provide 
supplementary  paid  up  life  insurance  for  such  employe  according  to 
the  American  Experience  Table  of  Mortality  and  3 j/2  per  cent  interest ; 
provided,  however,  that  if  the  employe  be  over  the  Standard  Age  of 
Retirement  on  the  date  when  he  comes  under  the  provisions  of  this 
Act,  the  amount  of  paid  up  life  insurance  of  such  employe  shall  be 
that  which  could  be  provided  at  the  Standard  Age  of  Retirement. 

If  the  employe  be  under  the  Standard  Age  of  Retirement  on  the 
date  when  he  comes  under  the  provisions  of  this  Act,  the  employer 


138  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

shall  thereafter  contribute  according  to  the  plan  of  premium  payment 
stated  in  Section  31,  subject  to  the  limitation  upon  contributions  stated 
in  Section  33,  amounts  sufficient  to  render  insurance  of  one  half  the 
amount  stated  in  Section  29,  less  the  amount  of  supplementary  paid 
up  life  insurance  specified  in  the  preceding  paragraph,  paid  up  when 
the  employe  attains  the  Standard  Age  of  Retirement. 

Subject  to  the  limitation  upon  contributions  stated  in  Section  33, 
the  employe,  if  he  be  under  the  Standard  Age  of  Retirement  on  the 
date  when  he  comes  under  the  provisions  of  this  Act,  shall  assume 
insurance  of  an  amount  equal  to  one  half  of  the  amount  stated  in 
Section  29,  as  of  his  attained  age  on  such  date. 

Section  33.     Limitation  Upon  Contributions  by  Employer  and  Em- 
ploye for  Life  Insurance 

Neither  employer  nor  employe  shall  contribute  towards  life  in- 
surance during  any  service  year  of  the  employe  more  than  two  per 
cent  of  each  periodical  payment  of  salary  for  such  year. 

Section  34.     Provisions    Regulating    Payment   of   Life    Insurance 
Otherwise  Than  in  Annuities 

If  an  employe  leaves  the  service  before  completion  of  at  least  ten 
years  of  service,  or  if  an  employe  leaves  the  service  before  attainment 
of  the  Minimum  Age  of  Retirement  after  completion  of  at  least  ten 
full  years  of  service  but  does  not  retain  his  rights  to  annuity,  or  if  an 
employe  attains  the  Standard  Age  of  Retirement  while  in  service  and 
has  no  wife,  or  if  a  future  entrant  attains  the  Standard  Age  of  Retire- 
ment while  in  service  before  completion  of  at  least  ten  years  of  ser- 
vice, insurance  payable  on  account  of  such  employe  under  the  pro- 
visions of  this  Act  shall  be  payable  to  the  widow  of  such  employe, 
or  if  there  be  no  widow,  then  as  stated  hereinafter  below: 

If  a  male  employe  dies  while  in  service  before  attainment  of  the 
Standard  Age  of  Retirement  leaving  no  widow,  or  if  a  female  employe 
dies  while  in  service,  then  any  insurance  payable  hereunder  shall  be 
payable  as  stated  hereinafter  below: 

That  part  of  the  amount  of  the  insurance  paid  for  by  the  employer 
or  employers  shall  be  available  to  children  of  the  blood  in  equal  amounts 
to  each,  or  to  parents  in  equal  amounts  to  each,  if  there  be  such,  in 
the  order  named,  unless  the  employe  signified  in  writing  his  desire 
that  such  be  paid  in  a  different  order  or  in  different  amounts  to  such 
relatives.  If  there  be  no  relatives  who  bore  such  relationship  to  the 
employe,  then  the  amount  of  the  insurance  paid  for  by  the  employer 
or  employers  in  the  group  shall  revert  to  the  credit  of  such  employer 


t  ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  139 

or  employers  to  reduce  the  amounts  which  such  employer  or  employers 
would  otherwise  have  to  pay  to  the  lund  for  insurance  during  the 
next  succeeding  year  and  the  part  of  the  insurance  paid  for  by  the 
employe  shall  be  payable  as  directed  by  the  employe  in  writing,  or  if 
the  employe  has  given  no  directions  in  writing  as  to  payment,  then 
it  shall  be  payable  to  the  heirs,  administrators,  or  assigns  of  the 
employe. 

If  a  present  employe  is  over  the  Standard  Age  of  Retirement  on 
the  date  when  he  comes  under  the  provisions  of  this  Act  and  has  no 
wife  on  such  date,  then  the  amount  of  the  insurance  shall  be  payable 
to  his  widow  if  such  exists  on  the  date  of  his  death,  or  if  there  be 
no  widow,  then  as  provided  in  the  preceding  paragraph. 

Section  35.  Disposition  of  Insurance  Furnished  by  Employer 
Upon  Resignation  or  Dismissal  from  Service  of  the  Em- 
ploye Before  His  Attainment  of  the  Minimum  Age  of  Re- 
tirement 

If  an  employe  resigns  or  is  dismissed  from  service  before  his 
attainment  of  the  Minimum  Age  of  Retirement,  the  part  of  the  reserve 
on  his  insurance  contributed  by  the  employer  shall  be  used  to  provide 
paid  up  life  insurance  for  such  employe  as  of  his  attained  age  on  the 
date  when  he  leaves  the  service.  Such  insurance  shall  be  payable  to 
a  widow  married  to  such  employe  before  his  withdrawal  from  service 
in  the  form  of  an  annuity  provided  such  employe  has  retained  annuity 
rights  for  himself  as  provided  in  this  Act,  but  if  such  employe  has 
not  retained  such  annuity  rights  or  if  he  was  not  entitled  to  annuity, 
or  if  the  widow  be  one  who  married  such  employe  subsequent  to  the 
date  of  his  withdrawal  from  service,  such  insurance  shall  be  payable 
in  bulk  sum  to  such  widow.  If  no  widow  survives  such  employe, 
such  insurance  shall  be  payable  to  relatives  of  such  deceased  employe 
or  revert  to  the  credit  of  the  employer  as  stated  in  Section  34.  Pro- 
vided that: 

(1)  If  the  employe  was  in  service  for  less  than  ten  years,  pay- 
ment will  be  conditional  upon  the  employe  continuing  the  insurance 
as  stated  in  Section  36  after  his  withdrawal  from  service. 

(2)  If  the  employe  was  in  service  for  ten  years  or  more,  payment 
will  be  conditional  upon  the  employe  either  retaining  his  right  to  an- 
nuity as  stated  in  Section  24,  or  continuing  the  insurance  as  stated  in 
Section  36  after  withdrawal  from  service. 


140  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Section  36.  Insurance  Privilege  for  Employe  Upon  Dismissal  or 
Withdrawal  from  Service  Before  Entering  Upon  His  An- 
nuity 

If  an  employe  resigns  or  is  dismissed  from  service  before  enter- 
ing upon  annuity,  such  employe  may  continue  insurance  for  the  amount 
for  which  he  was  insured  at  the  time  of  his  resignation  or  dismissal, 
as  follows : 

The  amount  of  paid  up  life  insurance  which  can  be  provided  by 
the  reserve  on  such  insurance,  applied  as  a  net  single  premium  at  the 
attained  age  of  the  employe  on  the  date  of  his  resignation  or  dismissal 
from  service  according  to  the  American  Experience  Table  of  Mor- 
tality and  3^2  per  cent  interest,  shall  be  determined  and  this  amount 
together  with  the  amount  of  supplementary  paid  up  life  insurance 
if  the  employe  be  a  present  employe  shall  be  set  aside  to  be  available 
for  relatives  of  such  employe  according  to  the  provisions  of  this  Act 
relating  to  such  relatives. 

The  employe  shall  assume  payment  of  premium  at  his  attained 
age  as  of  the  date  of  his  resignation  or  dismissal,  on  an  amount  of 
insurance  equal  to  the  amount  of  insurance  carried  in  the  fund  for 
him  on  the  date  of  his  resignation  or  dismissal  less  the  amount  of 
paid  up  insurance  determined  as  stated  in  this  section  above.  The 
payment  for  such  insurance  shall  be  on  the  basis  of  the  net  level 
annual  premium  required  to  render  the  insurance  paid  up  at  the 
Standard  Age  of  Retirement  together  with  a  loading  for  expense  of 
administration  to  be  determined  by  the  Retirement  Commission  but 
not  in  excess  of  10  per  cent  of  each  annual  premium. 

Section  37.  Annuities  for  Widows  of  Employes  Who  Die  While 
in  Service,  and  Before  Attaining  the  Standard  Age  of  Re- 
tirement, from  Causes  Other  Than  the  Performance  of  Duty. 

The  husband's  insurance  together  with  the  deductions  from  such 
husband's  salary  for  Old  Age  Retirement  Annuity,  accumulated  to 
the  date  of  his  death,  will  be  used  to  provide  an  annuity  for  his  widow 
as  of  her  attained  age  on  the  date  of  her  husband's  death. 

If  the  annuity  that  can  be  provided  with  such. funds  should  be 
less  than  25  per  cent  of  the  husband's  salary  at  the  time  of  his  death 
in  the  case  of  a  policeman  or  a  fireman,  or  less  than  20  per  cent  of 
the  husband's  salary  at  the  time  of  his  death  in  the  case  of  an  em- 
ploye who  is  other  than  a  policeman  or  a  fireman,  then  accumulations 
from  the  contributions  of  the  employer  on  behalf  of  such  husband 
for  Old  Age  Retirement  Annuity  shall  be  drawn  upon  to  such  an 
extent  as  would  provide  i or  a  widow  of  age  five  years  less  than  that 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  141 

of  her  husband,  a  total  annuity  equal  to  25  per  cent  of  said  salary 
in  the  case  of  a  policeman  or  a  fireman  or  20  per  cent  of  said  salary 
in  the  case  of  an  employe  who  is  other  than  a  policeman  or  a  fireman, 
provided,  however,  that  in  the  case  of  a  present  employe  a  greater 
amount  shall  not  be  drawn  from  contributions  of  the  employer  than 
would  be  necessary  if  the  accumulations  from  deductions  from  salary 
of  .the  employe  for  Old  Age  Retirement  Annuity  were  one  fourth  of 
the  amount  credited  to  the  employe  through  contributions  of  the  em- 
ployer if  the  employe  was  a  policeman  or  a  fireman,  or  one  third  of 
such  amount  if  the  employe  be  other  than  a  policeman  or  a  fireman, 
and  the  part  of  the  life  insurance  paid  for  by  the  employe  was  equal 
to  that  part  paid  for  by  the  employer  on  behalf  of  such  employe. 

If  the  widow  be  of  an  age  other  than  exactly  five  years  younger 
than  that  of  her  husband,  then  the  amount  to  be  deducted  from  the 
accumulations  of  the  employer's  contributions  shall  be  the  amount  that 
would  be  deducted  if  she  were  exactly  five  years  younger  than  her 
husband,  and  this  amount,  together  with  the  employe's  insurance  and 
the  accumulations  from  the  employe's  contributions  for  Old  Age  Re- 
tirement Annuity,  shall  be  used  to  provide  an  annuity  as  of  her  attained 
age  on  the  date  of  the  employe's  death. 

Section  38.  Annuities  for  Widows  of  Employes  Who  Withdraw 
from  Service  After  at  Least  Ten  Years  of  Service  and  Retain 
Their  Annuity  Privileges  but  Die  Before  Entering  Upon 
Annuity 

If  an  employe  who  shall  withdraw  from  service  after  at  least  ten 
years  of  service  and  retain  his  eligibility  for  annuity  shall  die  before 
entering  upon  his  annuity,  leaving  a  widow  who  was  married  to  him 
before  his  withdrawal  from  service,  such  widow  shall  receive  an  an- 
nuity of  the  amount  which  can  be  provided  for  her  according  to  the 
American  Experience  Table  of  Mortality  and  Zl/2  per  cent  interest 
at  her  attained  age  on  the  date  of  death  of  her  husband  from  the  total 
of  the  amounts  derived  as  follows: 

1.  The  accumulation,  on  date  of  death  of  such  former  employe 
from  deductions  from  salary   for  Old  Age  Retirement  Annuity   for 
him,  computed  as  stated  in  Section  24. 

2.  One  tenth  of  the  accumulation,  on  the  date  when  such  former 
employe  withdrew  from  service,  from  contributions  made  by  the  em- 
ployer to  provide  Old  Age  Retirement  Annuity  for  him,  together  with, 
if  he  shall  be  a  present  employe,  one  tenth  of  the  accumulation,  on 
the  date  of  his  withdrawal  from  service,  of  an  amount  equal  to  the 
amount  to  the  credit  of  such  employe  when  he  comes  under  the  pro- 


142  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

visions  of  this  Act  to  provide  the  supplementary  annuity  provided  by 
the  employer,  for  each  complete  year  of  service  rendered  in  addition 
to  ten  complete  years  of  service  up  to  one  hundred  per  cent  of  such 
accumulation  or  accumulations,  improved  at  3^  per  cent  interest  from 
the  date  when  he  withdraws  from  service  to  the  date  of  his  death. 

3.  An  amount  equal  to  the  amount  of  the  paid-up  life  insurance 
provided  by  the  employer  on  the  date  when  such  former  employe  with- 
drew from  service. 

4.  An  amount  equal  to  the  amount  of  the  paid-up  life  insurance 
paid  for  in  deductions  from  salary  of  the  employe.      > 

5.  An  amount  ecfual  to  any  amount  of  life  insurance  provided  by 
such  former  employe  under  the  provisions  of  this  Act  after  such  for- 
mer employe  withdrew  from  service,  unless  such  former  employe  shall 
have  signified  in  writing  his  desire  that  such  insurance  be  paid  other- 
wise. 

Section  39.  Survivorship  Annuities  for  Widows  of  Future  En- 
trants and  for  Widows  of  Present  Employes. 
On  the  date  when  an  employe  enters  upon  annuity,  if  he  has  a 
wife  who  was  married  to  him  before  his  retirement  from  service,  or 
on  the  date  when  a  present  employe  attains  the  Standard  Age  of  Re- 
tirement while  in  service  if  he  has  a  wife,  or  on  the  date  when  a 
future  entrant  attains  the  Standard  Age  of  Retirement  if  he  has  been 
in  service  for  at  least  ten  years  on  such  date  and  has  a  wife,  the  reserve 
on  his  insurance  shall  be  applied  to  provide  a  survivorship  annuity 
for  such  wife  as  of  her  attained  age  on  such  date. 

Section  40.     Survivorship  Annuities  for  Widows  of  Former  Em- 
ployes 

On  the  date  when  a  former  employe  enters  upon  Old  Age  Retire- 
ment Annuity,  if  he  has  a  wife  who  was  married  to  him  before  his 
retirement  from  service,  the  reserve,  as  of  the  elate  when  the  former 
employe  enters  upon  such  annuity,  on  the  paid-up  insurance  provided 
on  his  behalf  and  by  him  on  the  date  of  his  withdrawal  from  ser- 
vice, shall  be  used  to  provide  a  survivorship  annuity  for  such  wife 
as  of  her  attained  age  when  her  husband  enters  upon  such  annuity. 
To  this  amount  will  be  added  the  reserve  on  any  insurance  paid  for 
by  such  former  employe  after  his  withdrawal  from  service  unless 
such  employe  shall  have  signified  in  writing  his  desire  that  such  in- 
surance be  paid  otherwise.  The  amount  of  such  survivorship  annuity 
shall  be  that  which  can  be  provided  according  to  the  Table  of  Mor- 
tality and  that  rate  of  interest  that  would  have  been  applicable  if  the 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  143 

former  employe  had  died  after  withdrawal  from  service,  before  enter- 
ing upon  annuity. 

Section  41.  Survivorship  Annuities  for  Widows  of  Employes  Who 
Are  Over  the  Standard  Age  of  Retirement  on  the  Dates 
When  They  Come  Under  the  Provisions  of  This  Act 

If  a  present  employe  is  over  the  Standard  Age  of  Retirement  on 
the  date  when  he  comes  under  the  provisions  of  this  Act  and  has  a 
wife,  the  reserve  on  his  life  insurance  shall  be  used  to  provide  a 
survivorship  annuity  for  such  wife  as  of  the  attained  ages  of  em- 
ploye and  wife  on  the  date  when  he  comes  under  the  provisions  of 
this  Act. 

Section  42.  Modification  of  Provisions  Concerning  Annuities  for 
Widows  of  Present  Employes 

The  amount  of  annuity  for  the  widow  of  a  present  employe  shall 
not  in  any  case  be  less  than  the  annuity  provided  for  such  widow 
under  the  provisions  of  an  Act,  superseded  by  this  Act,  governing 
the  pension  or  pension  and  retirement  fund  in  which  such  present 
employe  was  a  participant  or  a  beneficiary. 

In  the  event  that  the  pension  provided  under  the  superseded  Act 
is  in  excess  of  the  annuity  which  can  be  provided  from  moneys  avail- 
able in  any  fund  created  under  this  Act,  then  such  excess  amount 
shall  be  treated  for  purposes  of  this  Act  as  a  supplementary  annuity. 

CHILDREN'S  ANNUITIES 
Section  43.     Children  Eligible  for  Annuity 

Annuities  shall  be  payable  to  children  of  the  blood,  under  18 
years  of  age,  of  employes  or  former  employes : 

(a)  Upon  death  of  any  such  employe  who  died  while  in  service,  or 

(b)  Upon  death  of  any  such  former  employe  who  withdrew  from 
service  upon  or  after  attainment  of  the  Minimum  Age  of  Retirement 
having  at  that  age  rights  to  Old  Age  Retirement  Annuity,  provided 
marriage  of  the  parents  took  place  before  the  employe  withdrew  from 
service,  or 

(c)  Upon  death  of  any  such  employe  retired  on  Old  Age  Re- 
tirement Annuity,  provided  marriage  of  the  parents  took  place  before 
his  retirement  on  annuity  or  his  attainment  of  the  Standard  Age  of 
Retirement  while  in  service,  whichever  event  first  occurred,  or 

(d)  Upon  death  of  any  such  employe  who  is  disabled  while  in 
performance  of  duty  during  such  employe's  absence  from  service  be- 


144  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

cause  of  such  disability,  until  such  employe  attains  an  age  five  years 
beyond  the  Standard  Age  of  Retirement. 

Section  44.     Amounts  of  Children's  Annuities 

x 

A  child's  annuity,  if  a  widow  survives,  shall  be  Ten  Dollars 
($10.00)  per  month,  except  that  it  shall  be  only  Five  Dollars  ($5.00) 
per  month  after  such  child  has  attained  the  age  of  fourteen  years 
when  such  child  is  not  attending  school;  if  no  widow  survives,  a 
child's  annuity  in  all  cases  specified  above,  shall  be  Five  Dollars 
($5.00)  more  per  month  than  the  amounts  stated;  provided,  how- 
ever, that  the  combined  annuities  of  a  widow  and  children  shall  not 
exceed  50  per  cent  of  the  salary  of  the  employe  in  the  case  of  a 
policeman  or  a  fireman,  or  40  per  cent  of  the  salary  of  the  employe 
if  he  be  other  than  a  policeman  or  a  fireman,  if  death  of  the  employe 
did  not  occur  while  in  or  in  consequence  of  the  direct  performance 
of  duty,  and  shall  not  exceed  75  per  cent  of  the  salary  of  the  employe 
in  the  case  of  death  of  the  employe  while  in  or  as  a  consequence  of 
the  direct  performance  of  duty,  nor  shall  the  combined  annuities  of 
the  employe  and  children  in  the  case  of  disability  incurred  in  con- 
sequence of  the  direct  performance  of  duty  exceed  the  salary  of  the 
employe  at  the  time  of  such  disability,  less  amounts  equal  to  the 
contributions  necessary  on  the  part  of  such  employe  for  Old  Age 
Retirement  Annuity  and  Life  Insurance  purposes. 

Such  amounts  as  are  necessary  for  children's  annuities  shall  be 
provided  by  the  employer  or  employers  except  that  in  cases  where 
an  amount  would  otherwise  be  paid  in  refund,  any  such  part  of  such 
amount  as  may  be  necessary  shall  be  used  to  provide  annuities  for 
the  children  concerned.  When  more  than  one  employer  is  involved 
in  the  group  under  the  jurisdiction  of  any  Retirement  Board,  each 
such  employer  shall  pay  annually  such  proportionate  part  of  the  total 
amount  to  be  paid  for  children's  annuities  as  the  sum  of  the  salaries 
of  all  employes  of  such  employer  in  the  group  for  the  preceding 
calendar  year  bears  to  the  total  sum  of  the  salaries  of  the  employes 
of  all  employers  in  the  group  for  said  year. 

SICKNESS  AND  ACCIDENT  INSURANCE 

Section  45.     Employes  Who  Shall  Be  Contributors  for  Sickness 
and  Accident  Insurance 

The  employes  who  shall  be  contributors  to  Sickness  and  Accident 
Insurance  shall  be  all  present  employes  and  all  future  entrants  who 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  145 

are  under  an  age  five  years  older  than  the  Standard  Age  of  Retire- 
ment whose  periods  of  service  are  in  excess  of  five  years,  except: 

(1)  Employes  absent  on  leave  of  absence,  who  are  not  receiving 
benefits  from  the  Sickness  and  Accident  Insurance  Fund  shall  not  be 
contributors  after  a  period  of  thirty  days  has  elapsed  from  the  date 
when  such  leave  of  absence  was  granted. 

(2)  Employes  who  are  in  receipt  of  benefits  from  the  Sickness 
and  Accident  Insurance  Fund,  or  employes  disabled  in  consequence 
of  the  direct  performance  of  duty. 

(3)  Employes  whose  salaries  are  on  other  than  an  annual  salary 
basis  unless  such  employes  after  service  for  a  period  of  at  least  five 
years,  shall  elect  to  become  contributors  to  the  Sickness  and  Accident 
Insurance  Fund. 

Section  46.     Amounts  to  Be  Contributed  by  Employer  and  Em- 
ployes for  Sickness  and  Accident  Insurance  Fund 

During  the  calendar  year  1920,  each  employer  shall  pay  to  each 
Retirement  Board  one  quarter  of  one  per  cent  of  the  salaries  for  the 
year  1919  of  all  employes  of  such  employer  under  the  jurisdiction  of 
each  such  Retirement  Board.  During  such  calendar  year  each  em- 
ploye shall  contribute  one  quarter  of  one  per  cent  from  each  pay- 
ment made  on  account  of  salary  after  he  comes  under  the  provisions 
of  this  Act. 

Thereafter  each  employer  shall  contribute  in  equal  amounts  with 
the  employes  of  such  employer  during  any  calendar  year.  In  deter- 
mining the  amounts  to  be  paid  by  the  employer  on  behalf  of  each 
employe,  the  contributions  made  by  each  employe  during  a  calendar 
year  shall  be  accumulated  at  regular  interest  to  the  end  of  such  year 
and  the  employer  shall  contribute  amounts  equal  to  the  total  of  such 
accumulated  amounts,  reckoning  regular  interest  between  the  end  of 
such  calendar  year  and  the  dates  when  payment  by  the  employer  are 
made.  ' 

Each  employe  shall  contribute  during  any  calendar  year  a  per- 
centage of  salary,  which  percentage  shall  be  the  same  for  all  em- 
ployes, to  be  determined  by  the  Retirement  Board  from  estimates 
based  on  the  experience  of  the  Sickness  and  Accident  Insurance  Fund 
of  the  preceding  year.  In  this  connection  the  salary  of  the  year  shall 
be  the  actual  salary  of  the  employe  during  the  year,  but  not  to  exceed 
$2500  per  year. 

If  at  the  end  of  any  calendar  year  a  balance  remains  in  the  fund, 
such  balance  shall  be  used  during  the  following  year  to  reduce  the 


146  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

payments  of  both  employers  and  employes  in  equal  amounts  as  be- 
tween employers  and  employes. 

If  at  any  time  there  is  .not  a  sum  sufficient  in  the  Sickness  and 
Accident  Insurance  Fund  of  a  Retirement  Board  to  pay  the  Sickness 
and  Accident  Insurance  benefits  provided  in  this  Act,  sums  equal  to 
the  amounts  required  for  such  purpose  may  be  transferred  to  such 
fund  from  any  other  fund  or  funds  under  the  control  of  such  board 
and  used  for  the  payment  of  such  benefits.  When  thereafter  any  sum 
in  excess  of  that  required  for  current  payment  of  benefits  from  the 
Sickness  and  Accident  Insurance  Fund  is  received  into  such  fund,  it 
shall  be  transferred  from  such  fund  and  placed  in  the  fund  or  funds 
from  which  such  s-ums  were  taken  until  a  sum  equal  to  the  full  amount 
so  taken  with  regular  interest  thereon  shall  be  returned  to  the  fund  or 
funds  from  which  such  transfer  or  transfers  were  made. 

Section  47.     Amount  of  Benefit  from  Sickness  and  Accident  Insur- 
ance Fund 

A  contributor  to  the  Sickness  and  Accident  Insurance  Fund  who 
becomes  disabled  on  account  of  illness  or  accident  not  in  consequence 
of  direct  performance  of  duty,  whose  disability  extends  beyond  the 
time  allowed  under  laws,  ordinances  or  administrative  rules  for  sick 
leave  with  pay  shall  be  eligible  for  the  benefits  provided  by  such 
Sickness  and  Accident  Insurance  during  the  period  of  disability  until 
the  employe  attains  an  age  five  years  beyond  the  Standard  Age  of 
Retirement,  except  that  the  period  during  which  the  disability  benefit 
shall  be  payable  shall  not  exceed  a  period  equal  to  one  half  the  period 
of  service  of  the  employe  before  disability  benefits  were  granted  nor 
shall  such  period  exceed  ten  years.  Payment  of  benefits  from  the 
Sickness  and  Accident  Insurance  Fund  shall  be  subject  to  rules  to  be 
adopted  by  the  Retirement  Board  which  rules  shall  prescribe  the 
length  of  time  which  must  elapse  between  the  time  when  such  dis- 
ability occurred  and  the  time  when  receipt  of  such  benefits  shall  begin. 

The  amount  of  such  benefit  shall  be  thirty  per  cent  of  the  salary, 
not  in  excess  of  $2500,  of  the  employe  at  the  time  of  disability,  less 
such  percentages  of  salary  as  such  employe  is  required  to  pay  for 
Old  Age  Retirement  Annuity  and  Life  Insurance  purposes.  Amounts 
equal  to  such  percentages  of  salary  shall  be  paid  into  the  Salary  De- 
ductions for  Annuity  Fund  and  the  Employes'  Life  Insurance  Fund 
from  the  Sickness  and  Accident  Insurance  Fund  and  placed  to  the 
credit  of  the  disabled  employe  therein. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  147 

Section  48. — Annuities  on  Account  of  Disability  or  Death  in  Conse- 
quence of  Direct  Performance  of  Duty 

If  an  employe,  before  his  attainment  of  an  age  five  years  beyond 
the  Standard  Age  of  Retirement,  shall  be  so  disabled  as  the  direct 
result  of  performance  of  duty,  that  he  cannot  perform  the  duties  of 
his  position,  he  shall  receive,  while  so  disabled,  an  annuity  equal  in 
amount  to  75  per  cent  of  his  salary  as  it  shall  be  at  the  date  when 
such  disability  results,  subject  to  the  limitations  hereinafter  stated. 

Such  employe  shall  also  receive  a  further  annuity,  subject  to  the 
limitations  hereinafter  stated,  of  the  amount  stated  in  Section  44,  on 
account  of  each  child  of  his  blood  under  18  years  of  age;  provided, 
however,  that  any  such  disabled  employe  shall  not  receive  any  annuity 
iri  excess*  of  the  amount  of  his  salary  at  the  time  of  such  injury  less 
the  sums  that  would  be  deducted  from  the  salary  of  such  employe 
for  Old  Age  Retirement  Annuity  and  Life  Insurance  purposes  as 
prescribed  herein,  if  such  employe  were  in  receipt  of  such  salary. 

If  the  employe  be  under  the  Standard  Age  of  Retirement  when 
such  disability  results,  contributions  equal  in  amount  to  the  contribu- 
tions theretofore  made  by  such  employe,  and  on  his  behalf  by  the 
employer,  for  Old  Age  Retirement  Annuity  and  Life  Insurance  of 
such  employe  shall  be  maintained  by  the  employer  during  the  period 
of  disability  until  the  employe  attains  the  Standard  Age  of  Retire- 
ment. Upon  attainment  of  such  age,  the  Old  Age  Retirement  Annuity 
rights  for  the  employe,  and  the  survivorship  annuity  rights  of  a  wife, 
if  the  employe  be  a  married  male,  shall  be  determined  in  the  same 
manner  as  if  the  employe  were  in  active  service. 

Subject  to  the  modifications  stated  in  Section  49,  the  amount  of 
annuity  prescribed  herein  shall  be  payable  to  the  employe  during  dis- 
ability until  he  shall  attain  an  age  five  years  beyond  the  Standard  Age 
of  Retirement.  Upon  attainment  of  such  age,  the  amount  of  annuity 
payable  to  the  employe  shall  be  the  amount  of  Old  Age  Retirement 
Annuity  payable  to  him  as  determined  when  he  attained  the  Standard 
Age  of  Retirement. 

If  an  employe,  before  his  attainment  of  an  age  five  years  beyond 
the  Standard  Age  of  Retirement,  shall  lose  his  life  in  consequence  of 
the  direct  performance  of  duty,  and  a  widow  shall  survive  him,  then 
such  widow,  provided  she  does  not  marry,  shall  receive  an  annuity, 
subject  to  the  modifications  stated  in  Section  49,  equal  to  50  per  cent 
of  the  salary  of  such  employe  as  it  shall  be  at  the  time  of  his  death 
or  injury,  until  the  date  when  the  employe,  if  he  had  been  alive, 
would  have  attained  an  age  5  years  beyond  the  Standard  Age  of 


148  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Retirement.  After  such  date,  her  annuity  shall  be  that  provided  for 
the  widow  of  an  employe  who  dies  while  in  service,  except  that  the 
amount  of  such  annuity  shall  not  be  less  than  the  survivorship  an- 
nuity that  would  have  been  provided  for  her  if  her  husband  had  lived 
to  the  Standard  Age  of  Retirement  and  had  received  in  salary  an 
amount  equal  to  that  received  at  the  time  of  his  death  or  injury. 

If  the  widow  of  an  employe  who  loses  his  life  in  consequence 
of  the  direct  performance  of  duty  marries,  her  annuity  after  such 
marriage  shall  be  that  provided  for  the  widow  of  an  employe  who 
dies  while  in  service  or  after  retirement  on  annuity.  In  such  cases, 
temporary  annuities  shall  be  computed  as  running  from  the  time  of 
the  employe's  death. 

All  annuities  payable  on  account  of  injury  or  death  of  an  em- 
ploye in  consequence  of  the  direct  performance  of  duty  in  excess  of 
the  Old  Age  Retirement  Annuity  provided  for  the  employe  upon 
attainment  of  the  Standard  Age  of  Retirement  from  the  Annuity 
Reserve  Fund  and  all  annuities  payable  to  widows  of  such  employes 
in  excess  of  the  annuities  provided  for  such  widows  from  the  An- 
nuity Reserve  Fund  shall  be  paid  by  the  employer. 

Section  49.     Effect  of  Workmen's  Compensation 

If  an  employe  or  the  members  of  a  family,  as  herein  described, 
of  an  employe,  shall  receive  any  compensation  under  or  by  virtue  of 
the  Workmen's  Compensation  Act  on  account  of  disability  or  death 
resulting  from  the  direct  performance  of  duty,  the  annuity  or  annui- 
ties prescribed  for  such  person  or  persons  shall  be  reduced  by  the 
amount  or  amounts  of  such  compensation,  if  such  amount  or  amounts 
be  less  than  such  annuity  or  annuities,  and  if  the  amount  or  amounts 
received  as  compensation  exceed  such  annuity  or  annuities,  then  an 
annuity  or  annuities  shall  not  be  payable  to  the  recipient  or  recipients 
of  such  compensation  until  the  expiration  of  the  period  of  time 
during  which  the  sum  of  the  annuity  or  annuities  payable  at  the  rate 
herein  stated  would  equal  the  sum  or  sums  received  as  compensation; 
except  that,  if  an  employe  attains  the  Standard  Age  of  Retirement 
while  absent  from  service  because  of  disability  incurred  as  the  direct 
result  of  the  performance  of  duty,  or  attains  the  Standard  Age  of 
Retirement  before  so  incurring  disability,  or,  if  the  widow  of  an  em- 
ploye who  lost  his  life  while  in  or  as  a  consequence  of  the  direct  per- 
formance of  duty,  attains  an  age  at  which  the  employe  if  alive  would 
have  attained  the  Standard  Age  of  Retirement,  then  the  Old  Age  Re- 
tirement Annuity  provided  for  such  employe  or  the  annuity  provided 
for  the  widow  shall  be  paid  to  the  employe  or  the  widow  as  the  case 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  149 

may  be  and  the  foregoing  provisions  of  this  section  shall  apply  only 
to  amounts  in  excess  of  such  annuity. 

Section  50.     Modification  Affecting  Employes  Whose  Salaries  Are 

on  Other  Than  an  Annual  Salary  Basis 

The  provisions  of  this  Act  shall  be  modified  in  so  far  as  they 
apply  to  employes  whose  salaries  are  on  other  than  an  annual  basis, 
as  follows: 

Old  Age  Retirement  Annuity 

The  employe  may  at  his  option  avail  himself  of  the  provisions  of 
this  Act  in  so  far  as  they  relate  to  Old  Age  Retirement  Annuity; 
except  that  a  present  employe  who  is  a  participant  in  or  beneficiary  of 
a  pension  or  a  pension  and  retirement  fund  created  by  an  Act  which 
this  Act  supersedes  shall  come  under  the  provisions  of  this  Act  re- 
lating to  Old  Age  Retirement  Annuity. 

The  amounts  to  be  paid  on  behalf  of  and  by  such  employe  for 
Old  Age  Retirement  Annuity  during  any  service  year  of  the  employe 
shall  be  determined  as  percentages  of  the  assumed  annual  salary, 
as  defined  in  this  Act,  of  such  employe  on  the  basis  that  such  employe 
will  be  in  service  each  year  for  a  full- working  year  and  that  the  salary 
or  wages  of  such  employe  shall  be  the  assumed  annual  salary  of  such 
employe. 

Such  employe  and  his  employer,  respectively,  shall  pay  during 
each  service  year  of  the  employe  amounts  equal  to  the  percentages 
determined  as  stated  in  the  preceding  paragraph  of  each  amount  pay- 
able in  salary  or  wages  to  the  employe  during  such  year,  regular  in- 
terest being  reckoned  on  all  payments  as  between  employer  and 
employe  during  such  year. 

Life-  Insurance 

An  employe  whose  salary  is  on  'other  than  an  annual  salary  basis 
may  at  his  option  avail  himself  of  the  provisions  of  this  Act  relating 
to  life. insurance  provided  such  employe  is  one  of  those  from  whose 
salary  deductions  were  or  are  being  made  for  Old  Age  Retirement 
Annuity  purposes. 

The  maximum  amount  of  Life  Insurance  available  under  the 
provisions  of  this  Act  to  any  employe  whose  salary  is  on  other  than 
an  annual  basis  shall  be  one  and  three  quarters  times  the  assumed 
annual  salary  of  such  employe,  in  the  case  of  a  policeman  or  a  fire- 
man and  one  and  one  quarter  times  the  assumed  annual  salary  in  the 
case  of  an  employe  who  is  other  than  a  policeman  or  a  fireman. 


150  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Insurance  of  the  maximum  amount  stated  or  of  any  lesser  amount 
shall  be  optional  with  the  employe. 

The  employe  shall  pay  in  advance  one  twelfth  of  the  annual 
premium  required  for  the  amount  of  insurance  assumed.  Thereafter 
payment  of  premiums  monthly  in  advance  shall  be  made  as  follows : 

From  each  amount  due  the  employe  in  wages  there  shall  be  de- 
ducted a  percentage  of  such  amount  equal  to  one  half  of  the  per- 
centage of  the  assumed  annual  salary  required  for  payment  of  prem- 
iums. At  the  end  of  the  month,  the  account  of  the  employe  for 
premium  payment  shall  be  credited  with  an  amount  to  be  paid  by  the 
employer  equal  to  that  proportionate  part  of  one  half  of  the  percentage 
of  the  assumed  annual  salary  required  to  pay  premiums  which  the 
number  of  days  during  which  the  employe  worked  for  the  employer 
during  the  month  bears  to  300  days. 

If  the  amounts  deducted  from  the  salary  of  an  employe  and  con- 
tributed by  an  employer  for  such  employe  during  any  month  are  in 
excess  of  the  amount  of  premium  required,  the  balance  shall  be  held 
as  a  credit  of  the  employe  to  the  end  of  the  current  service  year,  to 
be  used  to  provide  against  any  possible  deficiency  in  later  months  of 
such  year.  At  the  end  of  any  service  year,  if  an  excess  over  one 
twelfth  of  the  annual  premium  exists  in  the  premium  payment  ac- 
count of  the  employe,  the  amount  of  such  excess  shall  be  paid  to  the 
employe.  If,  at  the  end  of  any  month  a  deficiency  in  premium  pay- 
ment exists,  the  amount  of  such  deficiency  shall  be  paid  by  the  em- 
ploye, and  if  not  paid,  it  shall  be  deducted  with  regular  interest  from 
the  first  amount  due  the  employe  in  salary  or  wages  in  any  succeeding 
month  without  regard  to  the  limitation  in  contributions  stated  else- 
where in  this  Act,  provided  however,  that  if  the  amount  of  such  de- 
ficiency or  the  total  of  the  amounts  of  such  deficiencies  with  regular 
interest  should  exceed  the  reserve  on  the  insurance  paid  for  by  the 
employe,  or  if  any  such  deficiency  remains  unpaid  for  a  period  of  one 
year,  then  the  insurance  hereunder  shall  be  determined  in  the  same 
manner  as  if  the  employe  withdrew  from  the  service  of  the  employer. 

Sickness  and  Accident  Insurance 

Sickness  and  Accident  Insurance  of  an  amount  equal  to  30  per 
cent  of  the  assumed  annual  salary  of  the  employe  shall  be  optional 
with  employes  who  have  been  in  service  for  at  least  five  years  and 
whose  salaries  are  on  other  than  an  annual  salary  basis,  provided  such 
employe  is  one  of  those  from  whose  salary  deductions  were  or  are 
being  made  for  Old  Age  Retirement  Annuity  purposes. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  151 

The  employe  shall  pay  in  advance  one  twelfth  of  the  annual 
premium  required  for  the  amount  of  insurance  assumed.  Thereafter 
payment  of  premiums  monthly  in  advance  shall  be  made  as  stated 
in  this  section  above  under  Life  Insurance,  except  that  if  at  the  end 
of  any  month  a  deficiency  in  premium  payment  exists  and  such  de- 
ficiency is  not  removed  inside  of  30  days,  the  insurance  hereunder 
shall  cease.  The  insurance,  however,  may  be  reinstated  at  any  time 
if  the  employe  remains  in  service,  under  the  same  conditions  as  if 
the  employe  were  being  insured  against  Sickness  and  Accident  under 
the  provisions  of  this  Act,  for  the  first  time,  provided  such  employe 
shall  pass  such  medical  examination  as  is  prescribed  by  the  Retire- 
ment Board  concerned. 

Provisions  for  Other  Than  Monthly  Payments 

Notwithstanding  the  provisions  for  payment  of  premiums  for 
Life  Insurance  and  Sickness  and  Accident  Insurance  as  made  in  this 
Section  above,  the  Retirement  Board,  with  the  approval  of  the  Retire- 
ment Commission,  shall  have  the  power  to  arrange  for  premium  pay- 
ments on  any  other  basis  where  the  salary  or  wages  of  the  employe 
is  on  other  than  an  annual  salary  basis,  provided  such  arrangement 
shall  require  that  premium  payments  be  made  in  advance. 

Section  51.     Provisions   Relating  to   Life   Insurance   When   Such 
Insurance  Is  Optional 

In  any  group  of  employes  on  whom  life  insurance  is  optional, 
applicants  for  insurance  shall  be  subject  to  such  medical  examination 
as  may  be  prescribed  by  the  Retirement  Board,  except  that,  if  75 
per  cent,  but  in  .no  case  less  than  100  present  employes  on  whom  life 
insurance  is,  optional  in  any  group  under  the  jurisdiction  of  a  single 
Retirement  Board  shall  make  "application  for  life  insurance  of  the 
maximum  amount  permitted  under  this  Act,  prior  to  January  1,  1920, 
and  shall  pay  the  premiums  required  for  at  least  one  month  of  insur- 
ance, then  such  medical  examination  shall  be  waived  on  all  making 
such  application. 

If  any  such  employe  fails  to  pass  such  medical  examination,  he 
shall  be  given  the  option  of  withdrawing  his  application  for  insur- 
ance or  of  being  insured  for  an  amount  equal  to  twenty  per  cent  of 
the  amount  of  insurance  for  which  application  was  made  for  each  full 
year  of  service  rendered  after  the  date  when  application  for  such  in- 
surance was  made  until  such  employe  passes  such  examination  or  has 
been  in  service  for  five  years  from  the  date  of  such  examination. 
Thereafter  insurance  shall  be  for  the  full  amount  applied  for. 


152  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

When  life  insurance  is  optional  with  an  employe,  if  such  employe 
agrees,  at  the  time  of  making  application  for  insurance,  to  have  his 
insurance -increase  as  his  salary  increases  in  some  definite  ratio  of 
insurance  to  salary,  then  increase  of  insurance  in  such  ratio  due  to 
increase  in  salary,  shall  not  be  subject  to  medical  re-examination. 
Otherwise  each  increase  in  insurance  on  the  life  of  such  employe  with 
whom  life  insurance  is  optional  shall  be  subject  to  medical  re-exam- 
ination. 

When  life  insurance  is  optional  with  an  employe,  and  such  in- 
surance is  entered  upon  by  the  employe  at  a  time  other  than  the  be- 
ginning of  a  service  year,  the  insured  shall  have  the  option  of  assum- 
ing the  premium  rate  as  of  the  end  of  such  service  year  and  having 
the  reserve  accumulate  from  the  end  of  such  year  or  of  assuming 
the  premium  rate  as  of  the  beginning  of  such  year  and,  by  making  all 
premium  payments  for  such  year,  have  the  reserve  on  the  insurance 
provided  by  and  on  behalf  of  such  employe  accumulate  from  the  be- 
ginning of  such  year. 

An  employe  on  whom  life  insurance  is  optional  may  discontinue 
his  or  her  insurance  at  any  time.  When  the  insurance  is  discontinued, 
refund  shall  be  made  to  the  employe  of  the  reserve  as  of  the  date  of 
discontinuance  on  that  part  of  the  insurance  provided  from  the  amounts 
deducted  from  such  employe's  salary. 

Section  52.     Provisions  Affecting   Employes  While  on  Leave  of 
Absence 

.An  employe  shall  be  entitled  to  credit  as  service  for  any  or  all 
periods  of  leave  of  absence  subsequent  to  the  date  when  this  Act  comes 
in  force  and  effect  not  in  excess  of  one  tenth  of  the  entire  term  of 
service  rendered  by  such  employe  prior  to  such  leave. or  leaves  of 
absence,  provided  that  no  such  leave  of  absence  shall  be  counted  in 
computing  service  upon  which  subsequent  leaves  of  absence  shall  be 
granted. 

If  an  employe  during  any  period  of  leave  of  absence  and  not  re- 
ceiving benefits  from  the  Sickness  and  Accident  Insurance  Fund  shall 
pay  to  the  Retirement  Board  amounts  equal  to  the  percentage  of  salary 
theretofore  deducted  from  his  salary  for  Old  Age  Retirement  Annuity 
purposes,  his  employer  shall  pay  to  such  Retirement  Board  the  cor- 
responding amounts  required  for  such  purpose.  Otherwise  such  em- 
ployer shall  not  be  required  to  make  such  payments. 

During  "any  period  of  leave  of  absence  of  an  employe  without 
benefit  from  the  Sickness  and  Accident  Insurance  Fund,  the  employer 
of  such  employe  shall  not  be  required  to  make  any  payment  for  life 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  153 


insurance  purposes  for  such  employe.  Such  employe  shall  during  the 
period  of  such  leave  of  absence,  pay  to  the  Retirement  Board  amounts 
equal  to  those  theretofore  made  by  both  employer  and  himself  for 
such  purpose.  If  the  employe  fails  to  make  such  payments,  the  prem- 
iums as  they  become  due  shall  be  charged  against  the  reserve  on  the 
part  of  the  life  insurance  provided  from  deductions  from  the  salary 
of  such  employe,  and  upon  return  of  such  employe  to  service,  the 
amount  thus  charged  with  regular  interest  shall  be  deducted  from  the 
first  amount  or  amounts  otherwise  payable  in  salary  to  such  employe 
without  regard  to  the  limitation  upon  contributions  stated  in  this  Act, 
except  that,  if  the  amounts  thus  charged,  with  regular  interest  thereon, 
against  such  reserve,  shall  become  equal  to  such  reserve  or  if  one  full 
year's  premiums  shall  remain  unpaid,  the  insurance  shall  cease  and 
be  determined  in  the  same  manner  as  if  the  employe  had  retired  from 
service. 

If  an  employe  is  absent  on  leave  of  absence  without  pay  and  is 
not  in  receipt  of  benefit  from  the  Sickness  and  Accident  Insurance 
Fund,  he  shall  be  permitted  to  remain  a  contributor  to  the  Sickness 
and  Accident  Insurance  Fund  for  the  first  30  days  of  such  leave  of 
bsence,  by  payment  in  advance  of  an  amount  equal  to  the  amount 
being  paid  by  him  to  the  Sickness  and  Accident  Insurance  Fund  at 
the  time  when  such  leave  of  absence  is  granted. 

Section  53.     Provisions  Affecting  Employes  Absent  from  Service 
Because  of  Disability 

The  Retirement  Board  shall  require  an  employe  who  is  in  receipt 
of  any  benefit  because  of  disability,  to  undergo  medical  examination 
at  least  once  each  year  by  a  physician  or  physicians  designated  by  the 
Retirement  Board.  Should  the  Retirement  Board  decide  as  the  result 
of  such  examination  that  such  employe  is  no  longer  disabled  for  the 
performance  of  duty,  such  Retirement  Board  shall  discontinue  all  ben- 
efits to  such  employe.  The  head  of  the  Department  in  which  the 
employe  was  employed  at  the  time  of  his  disability  shall  upon  notifica- 
tion by  the  Retirement  Board  reinstate  such  employe  in  such  position 
as  was  held  by  and  at  such  a  rate  of  salary  as  was  paid  to  such  em- 
ploye at  the  time  when  disability  began. 

Should  such  employe  refuse  to  submit  to  any  such  examination, 
any  benefits  being  paid  such  employe  under  the  provisions  of  this  Act 
because  of  disability  shall  be  discontinued  immediately. 

Upon  application,  approved  by  the  proper  Retirement  Board,  of 
any  employe  who  is  in  receipt  of  benefits  under  the  provisions  of  this 


154  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Act  because  of  disability,  such  employe  shall  be  restored  to  active 
service  by  the  head  of  the  department  in  which  the  employe  was  em- 
ployed at  the  time  of  his  disability. 

Section  54.     Refunds 

If  any  employe  shall  withdraw  from  service  or  attain  the  Standard 
Age  of  Retirement  while  in  service,  before  completion  of  at  least  ten 
full  years  of  service,  refund  of  the  deductions  made  from  the  salary  of 
such  employe  for  Old  Age  Retirement  Annuity  purposes  shall  be  made 
upon  request,  or  if  no  request  is  made,  then  upon  attainment  of  the 
Standard  Age  of  Retirement.  If  an  employe  who  has  completed  at 
least  ten  full  years  of  service  shall  'withdraw  from  service  before  his 
attainment  of  the  Minimum  Age  of  Retirement,  refund  of  the  deduc- 
tions made  from  the  salary  of  such  employe  for  Old  Age  Retirement 
Annuity  purposes  shall  be  made  upon  request. 

The  amount  of  refund,  in  any  such  case,  shall  be  an  amount  equal 
to  the  accumulation  from  such  deductions  from  salary  of  such  employe 
on  the  date  when  such  employe  shall  withdraw  from  service,  improved 
at  interest  at  the  rate  of  three  and  one-half  per  cent  per  annum  from 
the  date  when  such  employe  withdraws  from  service  to  the  date  when 
request  for  refund  is  made,  provided,  however,  that  interest  accretions 
shall  cease  after  a  period  of  twenty  years  shall  have  elapsed  from  the 
date  when  such  employe  shall  withdraw  from  service. 

If  any  employe  shall  die  while  in  service,  or  if  any  former  employe 
who  has  withdrawn  from  service  before  attainment  of  the  Minimum 
Age  of  Retirement  shall  die  before  attainment  of  the  Minimum  Age  of 
Retirement,  or  if  any  employe  shall  attain  at  least  the  Minimum  Age 
of  Retirement  while  in  service  after  a  period  of  service  of  at  least  ten 
full  years,  or  if  any  former  employe  after  a  period  of  service  of  at  least 
ten  full  years  shall  attain  the  Minimum  Age  of  Retirement  without 
having  made  request  for  refund,  as  stated  above,  the  amounts  subject 
to  the  right  of  such  employe  to  receive  refunds  shall  be : 

The  amount  accumulated  from  the  deductions  from  the  salary 
of  an  employe  for  Old  Age  Retirement  Annuity  together  with  the 
amount  of  life  insurance  provided  by  employer  and  employe  for  such 
employe,  including  all  amounts  paid  by  the  employer  for  such  purposes 
in  lieu  of  deductions  from  the  salary  of  an  employe  disabled  in  con- 
sequence of  the  direct  performance  of  duty,  less  all  amounts  paid  in 
annuity  to  such  employe  and  his  widow,  shall  be  refunded,  provided, 
no  children  of  such  employe  shall  have  received  annuity  prior  to  the 
death  of  the  last  survivor  and  no  such  child  eligible  for  annuity  shall 
survive  the  last  survivor.  If  children  of  such  employe  received  an 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  155 

annuity  prior  to  the  death  of  such  survivor,  and  the  amount  deter- 
mined as  stated  in  the  preceding  paragraph  exceeds  the  amount  of 
life  insurance  provided  by  employer  and  employe  for  such  employe, 
the  amount  in  excess  of  the  amount  of  such  life  insurance  shall  be 
reduced  by  the  amount  paid  in  annuities  to  such  child  or  children,  and 
the  balance,  if  any,  together  with  the  life  insurance,  shall  be  refunded 
if  no  children  eligible  for  annuity  survive  the  last  survivor. 

If  children  eligible  for  annuity  survive  said  last  survivor  and  a 
balance  over  the  amount  of  life  insurance  and  the  amount  paid  in 
children's  annuities  exists,  such  part  of  such  balance  as  is  necessary 
shall  be  set  aside  in  the  Children's  Annuity  Fund  to  provide  children's 
annuities  and  the  remainder,  if  any,  shall  be  refunded.  When  an- 
nuities to  children  cease,  any  balance  remaining  shall  be  refunded. 

The  provisions  of  this  Act  relating  to  refunds  shall  be  modified 
as  follows: 

1 :  Refunds  of  deductions  from  salary  of  any  present  employe 
made  under  the  provisions  of  any  Act  which  this  Act  supersedes  shall 
be  made  only  in  accordance  with  the  provisions  of  such  superseded  Act. 

2 :  The  amount  accumulated  from  deductions  from  the  salary  of 
any  present  employe,  on  the  date  when  such  employe  attains  the  Stand- 
ard Age  of  Retirement,  made  under  the  provisions  of  this  Act,  shall 
include  the  total  of  the  present  values  as  of  the  date  when  such  em- 
ploye attains  the  Standard  Age  of  Retirement,  of  amounts  equal  to 
the  amounts  deducted  from  the  salary  of  such  employe  for  Old  Age 
Retirement  Annuity  for  him  made  after  the  employe  attains  the  Stand- 
ard Age  of  Retirement. 

3:  In  any  case  where  annuity  arises  through  disability  or  death 
of  an  employe  in  consequence  of  the  direct  performance  of  duty,  the 
amount  subject  to  refund  shall  not  be  reduced  by  any  amounts  paid 
in  annuity  prior  to  the  date  when  such  employe  attains  an  age  five 
years  beyond  the  Standard  Age  of  Retirement  or  would  have  attained 
such  age  if  alive. 

Refunds  of  accumulations  from  contributions  of  the  employer  for 
Old  Age  Retirement  Annuity  shall  be  made  to  the  employer  in  the 
form  of  a  credit  to  reduce  the  contributions  which  such  employer  would 
otherwise  be  required  to  make  during  the  following  year,  in  amounts 
and  under  conditions  as  stated  below.  . 

1.  If  an  employe  withdraws  from  service  and  receives  in  refund 
the  accumulation  from  deductions  from  salary  to  provide  an  Old  Age 
Retirement  Annuity  for  him,  the  entire  amount  accumulated  from 


156  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

contributions  of  .the  employer  to  provide  Old  Age  Retirement  Annuity 
for  such  employe  shall  be  credited  to  the  employer  when  refund  to 
the  employe  is  made. 

2.  If  the  employe  withdraws  from  service  and  does  not  receive 
refund  of  the  accumulation  from  deductions  from  his  salary  for  Old 
Age   Retirement  Annuity,   the  accumulation  of  contributions  by  the 
employer  for  Old  Age  Retirement  Annuity  on  behalf  of  such  employe 
shall  remain  to  the  credit  of  such  employe  until  the  date  when  the 
employe  attains  the  Standard  Age  of  Retirement.     On  such  date,  if 
the  employe  is  ineligible  for  annuity,  or  if  being  eligible  for  annuity 
all  of  the  accumulation  of  the  employer  is  not  to  be  credited  to  such 
employe  under  the  provisions  of  this"  Act  for  annuity  purposes  for 
such  employe,  the  accumulation  or  that  part  not  to  be  credited  to  the 
employe  on  such  date  shall  be  credited  to  the  employer  on  such  date. 

3.  If  the  employe  dies  while  in  service  before  attainment  of  the 
Standard  Age  of  Retirement,  any  balance  remaining  after  widow's 
or  children's  annuities  have  been  provided  for,  shall  be  credited  to 
the  employer  as  of  the  date  of  death  of  the  employe. 

Refunds  shall  be  made  as  directed  by  the  employe  in  writing.  If 
no  direction  is  given,  they  shall  be  made  to  the  widow  of  such  em- 
ploye if  such  widow  is  not  eligible  for  annuity,  or  if  no  widow  exists, 
then  to  the  children  of  such  employe  in  equal  amounts  to  each  or  if 
no  children  exist,  then  to  surviving  parents,  if  any,  in  equal  amounts 
to  each,  or  if  there  be  no  surviving  parents,  then  to  the  heirs,  ad- 
ministrators, or  assigns  of  such  employe. 

In  case  of  the  withdrawal  of  an  employe  from  service  the  Re- 
tirement Board  may  at  its  discretion  defer  payment  of  refunds  for  a 
period  not  to  exceed  one  year,  except  that,  if  at  the  end  of  the  year 
suit  is  pending  to  determine  the  employe's  right  to  retain  his  former 
position,  payment  of  refunds  shall  be  suspended  until  disposition  is 
made  of  such  suit.  When  payment  is  thus  deferred  regular  interest 
instead  of  interest  at  3-^2  per  cent  will  be  paid  for  the  period  during 
which  payment  was  deferred. 

Contributions  to  Provide  for  Refunds  as  Specified  in  This  Act 

To  provide  for  refunds  as  specified  in  this  Act,  there  shall  be 
deducted  from  the  accumulations  of  the  sums  deducted  from  the  salary 
of  each  employe  for  Old  Age  Retirement  Annuity,  and  the  accumu- 
lations of  the  sums  contributed  by  the  employer,  on  behalf  of  each 
such  employe  for  such  purposes,  amounts  equal  to  2  per  cent  of  such 
accumulations,  except  that  no  such  deduction  shall  be  made  from  con- 
tributions of  the  employer  to  provide  supplementary  annuities  for 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  157 

present  employes  and  no  such  deductions  shall  be  made  from  the 
amounts  credited  to  present  employes  when  they  come  under  the  pro- 
visions of  this  Act  because  of  contributions  made  to  any  pension  or 
pension  and  retirement  fund  created  by  an  Act  which  this  supersedes. 
All  deductions  from  the  salaries  of  employes  and  all  contributions 
from  employers  for  Old  Age  Retirement  Annuity  purposes  shall  in 
all  cases  where  such  amounts  are  subject  to  these  deductions  for  re- 
fund purposes  as  hereinbefore  stated,  be  increased  by  such  a  percent- 
age that  the  accumulated  amounts  from  such  deductions  from  salaries 
and  contributions  after  2  per  cent  is  deducted  therefrom  will  be  suffi- 
cient to  provide  the  annuities  specified  in  this  Act,  provided,  however, 
that  no  deduction  from  the  salary  of  an  employe  nor  corresponding 
contribution  of  an  employer  shall  exceed  the  limitation  on  contribu- 
tions specified  in  this  Act. 

Section  55.     Provisions  in  Cases  of  Transfer  of  Service 

In  case  an  employe  transfers  his  service  so  as  to  become  classified 
in  a  group  whose  affairs  are  administered  by  a  Retirement  Board  other 
than  that  which  administered  the  affairs  of  the  group  to  which  such 
employe  previously  belonged,  each  Retirement  Board  interested  shall 
retain  in  its  possession  the  accumulations  for  Old  Age  Retirement 
Annuity  purposes  for  such  employe  until  payment  therefrom  becomes 
necessary. 

The  amount  of  life  insurance  for  which  such  Retirement  Board 
shall  be  accountable  shall  be  the  amount  of  paid-up  life  insurance 
which  the  reserve  in  the  possession  of  such  board  for  life  insurance 
purposes  on  account  of  such  employe  will  provide  as  of  the  date  when 
such  employe  transfers  his  services. 

For  annuity  purposes  the  total  of  the  amounts  available  for  any 
such  purposes  in  the  possession  of  any  two  or  more  Retirement  Boards 
on  account  of  such  employe  or  other  beneficiary  shall  be  considered 
as  one  sum  and  each  Retirement  Board  interested  shall  pay  such  pro- 
portionate part  of  such  annuities  as  the  amount  in  the  possession  of 
such  Board  for  each  such  annuity  bears  to  the  total  sum  available 
for  each  such  annuity. 

Section  56.     General  Provisions 

An  employe  shall  receive  credit  as  service  for  all  periods  of  ser- 
vice rendered  by  such  employe  to  an  employer  as  defined  by  this  Act, 
including  any  term  of  service  allowed  by  any  Act  pertaining  to  pen- 
sions and  relating  to  such  employe  which  this  Act  supersedes. 


158  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Any  increase  in  salary  received  by  an  employe  during  any  service 
year  after  at  least  one  deduction  from  salary  has  been  made  for  an- 
nuity or  insurance  purposes  during  such  year  shall  not  be  taken  into 
consideration  under  the  provisions  of  this  Act  relating  to  Old  Age 
Retirement  Annuity  or  Life  Insurance  until  the  beginning  of  the  next 
succeeding  service  year. 

In  any  case  where  the  annuity  that  would  be  provided  under  this 
Act  is  less  than  Fifteen  Dollars  ($15.00)  per  month,  then  an  annuity 
of  Fifteen  Dollars  ($15.00)  per  month  shall  be  paid  the  annuitant 
as  a  temporary  annuity. 

Any  person  classed  as  an  employe  as  defined  herein,  or  any  per- 
son who  shall  hereafter  become  classed  as  an  employe  as  defined 
herein  shall  by  such  employment  accept  the  provisions  of  this  Act 
and  thereupon  become  contributors  under  said  Act  in  accordance  with 
the  terms  thereof.  And  the  provisions  of  this  Act  shall  become  a 
condition  of  the  employment  of  such  person  and  part  of  any  contract 
of  employment  entered  into  by  and  with  such  person. 

No  teacher  who  has  been,  or  who  shall  have  been,  elected  by  a 
Board  of  Education  in  any  city  of  more  than  one  million  inhabitants 
shall  be  removed  or  discharged,  except  for  cause,  upon  written  charges 
which  shall  upon  the  teacher's  written  request,  be  investigated  and 
determined  by  said  Board  of  Education,  whose  action  and  decision 
in  the  matter  shall  be  final. 

All  employes  in  any  branch  of  the  service  in  which  there  are 
employes  who  are  participants  or  beneficiaries  of  any  pension  or 
pension  and  retirement  fund  created  by  any  Act  which  this  Act  super- 
sedes, whose  salaries  are  on  an  annual  salary  basis,  shall  come  under 
the  provisions  of  this  Act. 

If  an  employe  for  whom  Old  Age  Retirement  Annuity  is  optional 
shall  elect  to  avail  himself  of  the  right  to  Old  Age  Retirement  An- 
nuity, such  employe  must  continue  in  possession  of  such  right  during 
his  subsequent  service  and  be  subject  to  deductions  from  salary  for 
such  purpose. 

If  an  employe,  upon  resignation  or  dismissal  from  service  or  at 
any  time  thereafter,  terminates  all  rights  to  life  insurance  under  the 
provisions  of  this  Act,  then  an  amount  equal  to  the  reserve  as  of  the 
date  of  termination  of  such  insurance  on  that  part  of  the  insurance 
provided  by  the  employer  of  such  employe  shall  revert  to  the  credit 
of  all  employers  of  the  group  concerned  to  reduce  the  amount  which 
such  employers  would  -otherwise  need  to  pay  during  the  following 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  159 

year  for  life  insurance  purposes  for  the  group  to  which  such  employe 
previously  belonged. 

Any  amount  paid  into  the  Employer's  Annuity  Fund,  the  Salary 
Deductions  for  Annuity  Fund,  the  Employer's  Life  Insurance  Fund 
or  the  Employes'  Life  Insurance  Fund  shall  begin  to  earn  interest 
from  the  last  day  of  the  calendar  month  when  such  amount  is  paid 
into  such  fund. 

If  an  employe  upon  or  after  withdrawal  from  service  before 
attainment  of  the  Minimum  Age  of  Retirement  and  after  at  least  10 
years  of  service  does  not  apply  for  refunds  he  shall  be  deemed  to  be 
eligible  for  annuity. 

In  case  of  disability  incurred  not  in  consequence  of  the  direct 
performance  of  duty,  amounts  equal  to  the  percentages  of  salary  re- 
quired, from  such  employe  and  the  employer  for  Old  Age  Retirement 
Annuity  and  Life  Insurance  purposes  for  such  employe  shall  be  paid 
from  the  Sickness  and  Accident  Insurance  Fund  to  the  Salary  Deduc- 
tions for  Annuity  Fund,  the  Employer's  Annuity  Fund,  the  Employes' 
Life  Insurance  Fund,  and  the  Employer's  Life  Insurance  Fund  re- 
spectively, and  placed  to  the  credit  of  the  disabled  employe  therein. 

In  any  case  where  the  combined  annuities  of  a  widow  and  chil- 
dren of  a  deceased-  employe,  or  of  a  disabled  employe  and  children 
of  such  employe,  would  exceed  the  limitation  upon  the  combined  an- 
nuities of  such  a  group  of  persons  as  stated  in  Section  44,  the  annui- 
ties of  such  widow  and  children,  or  of  such  employe  and  children, 
shall  be  prorated,  to  conform  to  the  limitation  stated,  according  to 
the  amounts  that  would  otherwise  be  received  by  such  persons. 

If  an  employe  fails  to  submit  himself  for  such  medical  examina- 
tion as  may  be  prescribed  by  the  Retirement  Board  to  determine  his 
fitness  for  life  insurance  or  fails  to  pass  such  examination,  then  if 
such  employe  is  thereafter  insured  the  premiums  for  such  insurance 
shall  be  the  same  as  if  the  employe  had  passed  such  examination. 

If  a  male  employe,  whose  salary  is  on  an  annual  salary  basis, 
enters  upon  annuity  or  attains  the  Standard  Age  of  Retirement,  hav- 
ing no  wife,  he  may  then  or  at  any  time  thereafter,  discontinue  his 
insurance.  When  such  insurance  is  discontinued,  refund  shall  be  made 
to  such  employe  of  an  amount  equal  to  the  reserve  thereon  as  of  the 
date  of  such  discontinuance  on  that  part  of  the  insurance  provided 
from  the  amounts  deducted  from  such  employe's  salary. 

Wherever  "contribute,"  "contributions,"  "contributor,"  or  "con- 
tributed" of  or  by  an  employe  are  mentioned  in  this  Act  they  shall 
mean  amounts  deducted  from  the  salary  of  an  employe  or  amounts 
otherwise  paid  by  an  employe  for  the  purposes  of  this  Act. 


160  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Any  person  who  has  retired  from  service  under  the  laws  or  rules 
of  any  pension  fund  or  pension  and  retirement  fund,  created  under 
and  by  virtue  of  the  .provisions  of  any  Act  or  Acts  superseded  by  this 
Act,  the  affairs  of  which  are  brought  under  the  jurisdiction  of  any 
Retirement  Board  created  under  and  by  virtue  of  this  Act  and  who 
is  or  shall  be  entitled  to  pension  or  annuity  under  the  provisions  of 
said  superseded  Act  or  Acts,  shall  be  treated  for.  annuity  purposes  by 
such  Retirement  Board  according  to  the  provisions  of  such  superseded 
Act  or  Acts  and  shall  receive  an  annuity  equal  in  amount  to  such  pen- 
sion or  annuity  from  such  Retirement  Board  in  accordance  with  the 
provisions  of  such  superseded  Act  or  Acts.  Widows,  children,  and 
other  dependents  of  such  retired  employe  shall  likewise  receive  pension 
or  annuity  in  accordance  with  the  provisions  of  such  superseded  Act 
or  Acts. 

Any  pensioner  or  annuitant  receiving  pension  from  any  pension 
fund  or  pension  and  retirement  fund  created  under  and  by  virtue  of 
the  provisions  of  any  Act  superseded  by  this  Act,  the  affairs  of  which 
are  brought  under  the  jurisdiction  of  any  Retirement  Board  created 
pursuant  to  this  Act  shall  receive  from  such  Retirement  Board  an 
annuity  equal  in  amount  to  the  pension  or  annuity  provided  for  such 
pensioner  or  annuitant  under  the  terms  of  such  superseded  Act  or 
Acts.  Such  annuity  shall  be  subject  to  all  the  provisions  concerning 
same  of  the  Act  or  Acts  under  which  it  was  granted  and  was  there- 
tofore payable.  Widows,  children,  and  other  dependents  of  such  re- 
tired employe  shall  likewise  receive  pension  or  annuity  in  accordance 
with  the  provisions  of  such  superseded  Act  or  Acts. 

Whenever  a  present  employe  (or  the  widow  of  such  employe) 
who  is  or  was  a  participant  in  or  beneficiary  of  a  pension  or  pension 
and  retirement  fund  created  under  and  by  virtue  of  the  provisions 
of  an  Act  or  Acts  superseded  by  this  Act,  the  affairs  of  which  are 
brought  under  the  jurisdiction  of  a  Retirement  Board  created  under 
and  by  virtue  of  this  Act,  shall  become  an  annuitant  in  accord  with  the 
provisions  of  this  Act,  and  the  status  of  such  employe,  or  widow, 
shall  subsequently  become  such,  that  if  the  annuity  to  such  person 
were  granted  in  accord  with  the  provisions  of  the  said  superseded 
Act  or  Acts,  such  annuity  would  cease,  then  all  of  such  annuity  which 
is  in  excess  of  that  provided  by  or  from  the  accumulations  of  the  fol- 
lowing amounts  shall  cease.  Such  amounts  are :  the  amounts  credited 
to  such  employe  on  the  date  when  he  shall  have  come  under  the  pro- 
visions of  this  Act,  on  account  of  service  rendered  prior  to  such  date 
and  chargeable  against  his  employer,  all  amounts  credited  to  such 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  161 

employe  on  such  date  on  account  of  deductions  from-  his  salary  or 
payments  otherwise  made  by  him  to  the  pension  or  pension  and  retire- 
ment fund  referred  to,  all  payments  made  by  and  on  behalf  of  such 
employe  by  his  employer  and  himself,  since  he  shall  have  come  under 
the  provisions  of  this  Act,  and  the  amount  of  the  life  insurance  of 
such  employe,  all  disposed  of  and  used  in  accordance  with  the  pro- 
visions of  this  Act. 

In  the  event  that  an  annuity  or  a  part  of  an  annuity  becomes 
discontinued  under  the  provisions  of  an  Act  which  is  superseded  by 
this  Act,  then  any  reserve  held  on  such  annuity  or  part  of  an  annuity 
shall  revert  to  the  credit  of  the  employer  interested  to  be  used  to 
reduce  the  amount  which  such  employer  would  otherwise  pay  under 
the  provisions  of  this  Act. 

A  Retirement  Board  with  the  approval  of  the  Retirement  Com- 
mission may  specify  a  date  upon  which  all  employes  under  the  juris- 
diction of  such  board  who  enter  service  during  any  part  of  the  calen- 
dar year  following  such  ,date  shall  be  considered  as  entering  service, 
and  when  such  date  is  thus  specified,  all  employes  entering  on  any 
subsequent  date  during  such  calendar  year  shall  be  considered  as 
having  entered  upon  the  date  specified. 

Except  as  herein  provided  no  member  of  a  Retirement  Board  or 
of  the  Retirement  Commission  nor  any  one  connected  with  a  Retire- 
ment Board  or  the  Retirement  Commission  shall  have  any  interest, 
direct  or  indirect,  in  the  gains  or  profits  of  any  investment  made  by 
such  board  or  commission,  nor  as  such,  directly  or  indirectly,  receive 
any  pay  or  emoluments  for  his  services  except  as  herein  provided. 
Nor  shall  any  such  person  as  an  agent  or  partner  of  others  borrow 
any  funds"  or  deposits,  or  in  any  manner  use  the  same,  except  to  make 
such  current  and  necessary  payments  as  are  authorized  by  such  board 
or  commission,  nor  shall  any  member  of  any  such  board  or  commis- 
sion or  anyone  connected  with  such  board  or  commission  become  an 
endorser  or  surety  or  become  in  any  manner  an  obligor  for  moneys 
loaned  by  or  borrowed  of  any  such  board  or  commission. 

Section  57.     Annuities  Exempt  from  Attachment,  Etc. 

The  right  of  a  person  to  annuity  or  any  other  right  accruing  to 
any  other  person  under  the  provisions  of  this  Act,  and  the  moneys  in 
the  various  funds  created  under  this  Act,  are  hereby  exempt  from  any 
State  or  municipal  tax,  and  exempt  from  levy  and  sale,  garnishment, 
attachment,  or  any  other  process  whatsoever,  and  shall  be  unassign- 
able except  as  in  this  Act  specifically  otherwise  provided. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  163 


CHAPTER  VIII 


SURVEY  OF  POSITIONS  IN  THE  PUBLIC  SER- 
VICE IN  ILLINOIS 


SHOWS  WIDE  FIELD  FOR  PENSION  LEGISLATION  AS 

TO  STATE,  COUNTY,  SCHOOL  AND  MUNICIPAL 

EMPLOYES 


I 


A  pension  system  for  public  employes  and  officials  is  deemed 
applicable  only  to  those  having  permanence  of  tenure  in  their  posi- 
tions or  in  the  service  concerned. 

There  are  $2,595  employes,  appointive  officials  and  elective  officers 
in  the  public  service  of  (1)  Illinois,  (2)  its  counties,  (3)  its  municipal 
corporations  having  1,000  or  more  inhabitants  according  to  the  United 
States  census  of  1910,  and  (4)  its  school  districts. 

The  total  number  of  appointive  officials  and  employes  is  77,459. 
Of  these  66,922  are  under  tenure  legislation,  in  positions  for  which 
the  men  and  women  employed  are  selected  under  laws  requiring  ex- 
aminations of  their  qualifications  for  the  duties  of  the  positions  con- 
cerned. These  tenure  laws  are  the  public  school  teachers'  acts,  the 
civil  service  acts,  and  the  fire  and  police  commissioners'  act. 

All  told  58,359  of  the  77,459  appointive  employes  and  officials 
are  now  covered  by  pension  legislation.  Of  this  number  only  1,152 
are  not  under  permanent  tenure  legislation.  These  1,152  are  police- 
men and  firemen  in  certain  cities  which  have  been  generally  assumed 
to  give  them  permanence  of  tenure  merely  by  custom. 

Of  the  66,922  positions  covered  by  tenure  legislation,  57,207  are 
covered  by  pension  legislation.  All  of  the  30,495  teachers  appointed 
under  the  public  school  teachers'  acts,  this  number  excepting  the  faculty 
of  the  University  of  Illinois,  and  all  the  569  policemen  and  firemen 
appointed  under  the  police  and  fire  commissioners'  act,  as  well  as  the 
1,152  policemen  and  firemen  having  permanence  of  tenure  merely  by 
custom,  are  now  under  pension  laws.  But  of  the  34,706  employes 
appointed  for  tenure  during  good  behavior  and  efficiency  under  the 
civil  service  acts  8,563  are  not  now  covered  by  any  of  the  present 
fifteen  pension  laws  for  public  employes  in  the  statutes  of  Illinois. 


164  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Of  the  10,537  appointive  officials  and  employes  whose  positions 
are  not  filled  under  any  of  the  examination  or  permanent  tenure  acts, 
none  is  now  included  under  these  pension  laws. 

Likewise,  out  of  the  5,136  elective  officers,  including  the  judges, 
chosen  to  serve  in  public  offices  for  stated  terms,  there  is  none  now 
covered  by  pension  legislation. 

These  figures  were  disclosed  by  a  Survey  of  Positions  in  the 
Public  Service  of  Illinois  conducted  by  this  Commission  of  1918,  sup- 
plementing a  similar  survey  by  the  Commission  of  1916. 

Purpose  of  Survey  to  Determine  Extent  of  Field  for  Pension  Leg- 
islation 

One  of  the  main  objects  of  this  survey  was  to  determine  the  extent 
of  the  field  for  pension  legislation  by  the  State.  Such  a  survey  should 
look  not  only  to  the  immediate  future,  but  also  if  possible  to  supply- 
ing the  legislators  with  information  for  a  statesmanlike  view  of  the 
more  remote  future. 

This  object  called  first  of  all  for  complete  statistits  on  positions 
in  the  public  service  now  filled  under  any  state  law  calling  for  tests 
of  qualifications  or  assuring  permanency  of  tenure  during  good  be- 
havior;-also  for  statistics  as  to  positions  held  subject  to  custom  assur- 
ing such  continuity  in  service.  The  Commission  recognized  at  the 
outset  that  wherever  the  permanency  of  tenure  required  for  the  great- 
est efficiency  in  service,  public  or  private,  is  found,  there  a  superannu- 
ation problem  has  appeared  or  inevitably  will  appear,  rendering  neces- 
sary some  provision  for  old-age  retirement. 

Secondly,  this  object  called  for  statistics  on  the  positions  of  ap- 
pointive officials  and  employes,  even  though  such  positions  are  filled 
on  a  political  basis.  In  this  the  Commission  recognized  the  general 
trend  of  legislation  in  Illinois  and  other  states  toward  the  extension 
of  the  merit  system  in  the  public  service  through  the  enactment  of 
civil  service  laws,  providing  for  classification  of  positions  according 
to  duties,  competitive  examinations  for  appointment,  and  continuity 
in  service  during  good  behavior  and  efficiency.  It  recognized  that  in 
view  of  this  trend,  the  appointive  positions  may  ultimately  all  be  put 
on  a  basis  involving  permanency  of  tenure  instead  of  turnover  with 
every  political  turnover. 

Why  Statistics  on  Elective  Officers  Are  Included 

In  the  third  place,  the  object  of  discovering  the  scope  of  the  field 
for  pension  legislation  called  for  statistics  on  elective  offices — state, 
county  and  municipal.  These  were  gathered  with  the  idea  that  as 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  165 

a  result  of  the  consolidation  tendency  and  the  short-ballot  movement, 
at  a  time  of  a  prospective  convention  for  the  revision  of  the  con- 
stitution of  the  State,  many  of  these  elective  offices  whose  occupants 
perform  only  routine  or  expert  non-policy-making  duties  will  probably 
be  put  on  an  appointive  basis  under  a  plan  involving  permanency  of 
tenure.  The  Commission  recognizes  the  tendency  toward  acceptance 
of  the  principle  that  policy-making  offices  only  should  be  elective  offices 
and  that  all  of  the  offices  and  positions  calling  solely  for  ministerial 
services,  whether  expert  or  routine,  should  offer  the  same  opportuni- 
ties for  life  careers  that  corresponding  positions  in  the  service  of  large 
private  organizations  now  hold  out. 

Moreover,  there  is  something  to  be  said  as  to  elective  officers, 
re-elected  for  so  many  succeeding  terms  that  they  virtually  give  their 
working-lives  to  the  public  service.  Indeed,  the  Commission  has  re- 
ceived a  communication  on  this  score  from  one  of  the  judges  repre- 
senting other  judges  of  courts  of  record.  This  called  attention  to 
pension  systems  of  churches  for  their  ministers,  of  industrial  cor- 
porations, railway  companies,  and  banks,  for  their  officers  and  em- 
ployes, of  cities  for  policemen  and  firemen,  and  of  the  law  of  the 
United  States  Government,  enacted  half  a  century  ago,  which  provided 
that  when  a  judge  of  the  federal  court,  aften  ten  years  in  such  court, 
had  reached  the  age  of  70,  he  could  retire  on  full  salary  for  the  re- 
mainder of  his  life. 

Judges  Cite  Pensions  for  Others  as  Showing  Public  Policy 

The  communication  submitted  these  cases  as  indicating  the  gen- 
eral public  policy  in  this  country.  It  then  asked:  "Is  there  any  rea- 
son why  this  policy  should  not  extend  to  the  judges  of  the  courts  of 
record  in  the  great  State  of  Illinois  whom  the  citizens  have  elected, 
and  who  have  *  *  *  during  long  periods  rendered  such  faithful  and 
full  service  that  the  citizens  themselves  have  time  and  again  re-elected 
them?" 

This  communication  stated  that  a  bill  providing  for  pensions  for 
the  judges  had  been  passed  by  the  Senate  at  the  last  session  of  the 
General  Assembly,  but  had  failed  to  pass  the  House. 

The  Commission  did  not  feel  that  the  subject  of  pensions  for  the 
judges  called  for  immediate  consideration  in  connection  with  the  devel- 
opment of  a  standard  plan  for  an  annuity  and  insurance  system  for 
the  rank  and  file  of  the  public  employes.  This  is  so  even  though 
judges  are  more  commonly  re-elected  for  successive  terms  than  are 
other  officers.  But  the  petition  on  behalf  of  the  judges  is  cited  as  an 
indication  of  the  reasons  for  including  in  the  survey  on  the  extent  of 


166  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

the  field  for  possible  future  pension  legislation  statistics  on  the  num- 
ber of  elective  offices. 

Townships  and  Cities  or  Villages  Under  1,000  Eliminated 

Eighty-five  of  the  counties  of  Illinois  are  under  township  organi- 
zation while  seventeen  are  not  under  township  organization.  Whether 
or  not  to  have  statistics  gathered  on  the  township  employes  as  such, 
was  a  matter  considered  by  the  Commission  in  adopting  its  plan  for 
'the  survey. 

Similarly  the  question  of  gathering  figures  on  the  number  of  offi- 
cers and  employes  in  the  cities  and  villages  of  less  than  1,000  in  pop- 
ulation was  considered. 

The  relation  of  employer  and  employe  in  the  service  of  the  town- 
ships, and  cities  or  villages  of  less  than  1,000  is  largely  personal  in 
its  nature,  as  contrasted  with  the  impersonal  character  of  the  relation- 
ship between  employer  and  employe  in  the  larger  services,  especially 
those  of  the  metropolitan  service  in  Chicago  or  the  service  in  the  State 
institutions  and  departments.  Furthermore,  there  are  frequent  turn- 
overs in  these  positions  on  a  political  basis.  Most  township  employes 
and  officials  are  employed  on  a  part-time  basis. 

Finally  the  services  of  the  to'wnships,  and  cities  or  villages  of 
less  than  1,000,  are  made  up  of  such  small  and  scattered  groups  of 
employes  that  it  would  be  extremely  difficult  to  join  them  together 
satisfactorily  either  to  the  persons  concerned  or  for  administrative 
purposes  under  a  pension  system. 

For  these  reasons  the  Commission  decided  not  to  include  the 
positions  of  the  townships  and  the  cities  or  villages  of  less  than  1,000 
in  the  survey.  The  Commission  suggests  that  it  may  be  desirable, 
however,  to  consider  at  least  some  of  them  again  after  the  State  has 
had  experience  with  the  equalization  features  of  the  proposed  Standard 
Plan,  designed  to  replace  immediately  the  existing  pension  laws,  for 
public  school  teachers,  the  state  institution  teachers,  the  policemen  and 
the  firemen  of  cities  of  5,000  and  over,  and  the  various  groups  of  em- 
ployes in  the  public  service  of  Chicago,  the  policemen  of  the  three -large 
park  systems  in  Chicago,  and  the  civil  service  employes  of  Cook  County. 

Figures  Given  in  1916  Report  Are  Used  as  Basis  of  Survey 

The  starting  point  for  the  survey  was  the  figures  in  Chapter  VII 
of  the  report  of  the  Illinois  Pension  Laws  Commission  of  1916  (page 
200),  in  which  were  given,  as  that  report  says,  "tables  tending  to  show 
the  extent  of  present  and  possible  future  pension  legislation  for  public 
service  employes  in  this  State." 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  167 


The  present  Commission  found  several  good  reasons  why  it  should 
work  on  the  basis  of  the  1916  statistics  as  to  numbers  of  positions,  in 
so  far  as  they  were  gathered.  One  of  the  main  reasons  was  found  in 
the  fact  that  employment  conditions  in  the  public  sercice  as  well  as  in 
other  services  were  more  nearly  normal  in  1916  than  they  were  in 
1918  in  view  of  the  effects  of  war  needs  as  they  have  developed. 
In  1918,  prior  to  the  signing  of  the  armistice,  some  branches  of  the 
public  service  were  undermanned,  and  in  all  branches  there  was  an 
unusually  large  proportion  of  temporary  employes,  many  of  whom 
were  occupying  positions  belonging  to  employes  who  were  absent  on 
account  of  their  service  as  soldiers,  sailors,  Red  Cross  nurses,  and  in 
other  capacities  either  directly  or  indirectly  related  to  military  service. 

On  these  accounts  it  was  thought  that  1916  statistics  would  be 
a  better  guide  to  the  future  than  the  statistics  on  conditions  as  of  1918. 

Another  reason,  of  course,  was  the  avoidance  of  duplication  of 

(effort  where  that  could  be  done. 
Still  another  reason  for  using  the  1916  statistical  figures  is  that 
the  tables  on  length  of  service  and  salaries,  supplementing  the  tables 
on  mere  numbers  of  employes,  were  worked  out  in  the  1916  report, 
and  it  was  thought  that  it  would  prevent  confusion  to  stick  to  those 
figures  in  so  far  as  possible  both  in  making  specific  references  to  the 
former  report,  and  in  the  general  discussions  of  the  1918-19  report. 

Thanks  to  City,  County,  and  State  Officials  for  Replies  to  Questions 

The  method  followed  by  the  Commission  in  gathering  supple- 
mentary statistics  was  that  of  sending  out  circular  letters  containing 
sets  of  questions  and  also  special  letters  on  specific  points  addressed 
to  public  officials.  The  questionnaires  were  sent  to  county  clerks,  city 
and  village  clerks,  chiefs  of  police  departments,  chiefs  of  fire  depart- 
ments, and  to  other  officials. 

The  statistics  in  this  chapter  were  compiled  on  the  basis  of  in- 
formation from  these  sources.  The  figures  in  the  actuarial  chapters 
were  compiled  on  the  basis  of  questionnaires  filled  out  by  individual 
employes.  This  accounts  for  any  discrepancies  in  the  totals. 

The  Commission  wishes  to  record  its  thanks  to  these  public  officers 
for  their  co-operation  in  the  gathering  of  information  for  this  survey. 

Employes  Appointed  Under  Five  Civil  Service  Acts 

Appointments  on  the  basis  of  merit  proved  in  open,  competitive 
examinations  and  for  tenure  during  good  behavior  and  efficiency,  are 
provided  in  four  important  civil  service  laws  in  the  statutes  of  Illi- 
12 


168  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

nois  and  a  fifth  law  not  known  as  a  civil  service  law  but,  nevertheless, 
containing  civil  service  provisions.     These  are: 

1.  The  State  Civil  Service  Law,  applying  to  positions  directly 
in  the  service  of  the  State,  in  its  departments,  and  its  institutions. 

2.  The  County  Civil  Service  Law,  applying  to  about  one-third 
of  the  employes  in  the  service  of  Cook  County. 

3.  The  City  Civil  Service  Act,  applying  not  only  to  policemen 
and  firemen,  but  also  to  other  classes  of  employes  of  the  City  of  Chi- 
cago, which  adopted  the  act  by  referendum  vote  in  1895,  and  the 
employes  of  the  following  five  cities,  which  adopted  the  act  by  refer- 
endum votes  in  the  years  given:     Evanston,  1897;  Rockford,  1903; 
Champaign,  1906;  Springfield,  1907;  Waukegan,  1910. 

4.  The  Park  Civil  Service  Law,  applying  both  to  policemen  and 
all  other  employes  of  the  three  large  park  systems;  namely,  Lincoln 
Park,  West  Chicago  parks,  and  South  Chicago  parks  in  Chicago. 

5.  The  so-called  Fire  and  Police  Commissioners'  Act,  applying 
only  to  the  firemen  and  the  policemen  in  the  following  twelve  cities, 
which  adopted  the  same  by  referendum  votes  in  the  years  indicated: 
Aurora,  1903;  Elgin,  1903;  Rockford,  1903;  Waukegan,  1906;  Joliet, 
1907;  Evanston,  1908;  East  St.  Louis,  1909;  Peoria,  1910;  Spring- 
field, 1910;. Spring  Valley,  1911;  Freeport,  1913;  Champaign,  1918. 

It  will  be  noted  that  both  the  City  Civil  Service  Act  and  the  Fire 
and-  Police  Commissioners'  Act  have  been  adopted  by  the  following 
five  cities :  Champaign,  Evanston,  Rockford,  Springfield,  and  Wau- 
kegan. In  these  five  cities  there  are  a  total  of  196  paid  firemen  and 
148  policemen.  These  are  included  in  the  480  paid  firemen  and  433 
policemen  in  the  twelve  cities  under  the  Fire  and  Police  Commission- 
ers' Act. 

Provide  for  Service  During  Good  Behavior  and  Efficiency 

All  of  the  five  acts  listed  above  provide  for  commissions  to  con- 
duct open,  competitive  examinations  of  applicants  for  the  positions 
and  the  departments  concerned  are  required  to  make  appointments 
from  the  eligible  lists  established  by  the  commissioners.  All  of  them 
provide  for  removal  only  for  cause  and  all  of  them  safe-guard  re- 
movals, the  City  Civil  Service  Act,  the  Park  Civil  Service  Act,  and 
the  Fire  and  Police  Commissioners'  Act  giving  the  right  of  hearing 
in  all  cases,  and  the  State  and  County  acts  having  somewhat  weaker 
provisions  in  reference  to  this  matter;  but  on  a  foundation  of  fitness 
at  entrance,  all  of  these  laws  contemplate  continuance  in  service  so 
long  as  efficiency  lasts. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


169 


Moreover,  the  Commission  Form  of  Government  Act  in  force  in 
many  cities  in  Illinois,  expressly  provides  that  nothing  therein  con- 
tained shall  repeal  either  the  Civil  Service  Act  or  the  Fire  and  Police 
Commissioners'  Act  in  Jorce  in  any  city,  or  prevent  any  city  f  rom 
adopting  eitner  the  City  Civil  Service  Act  or  the  Fire  and  Police 
Commissioners'  Act.  While  the  Commission  Form  of  Government 
Act  gives  the  commissioners  as  the  heads  of  departments  wide  powers 
of  removal  where  neither  the  Civil  Service  Act  nor  the  Fire  and  Police 
Commissioners'  Act  is  in  force,  still  the  Commission  Form  of  Gov- 
ernment Act  specifies  that  removal  shall  be  made  when  the  employes 
are  not  efficient,  and  seems  also  to  contemplate,  though  without  ex- 
pressly providing  for  it,  tenure  during  good  behavior  and  efficiency. 

All  Teachers  Must  Hold  Certificates  of  Qualifications 

All  public  school  teachers "  in  Illinois  must  hold  certificates  of 
qualifications  secured  on  the  basis  of  examination  under  laws  which 
either  imply  that  they  will  continue  in  the  teaching  profession  or  else 
specifically  provide  for  their  permanence  of  tenure.  The  latter  is  the 
case  with  the  Chicago  public  school  teachers. 

The  law  on  certification  of  the  qualifications  as  to  teachers  as  a 
prerequisite  for  appointment,  is  very  broad  and  strong.  It  provides 
that  "no  one  shall  be  authorized  or  employed  to  teach  in  the  common 
schools  of  the  State  or  shall  receive  for  teaching  any  part  of  any 
school  fund  who  is  not  of  good  character  and  who  does  not,  at  the 
time  he  enters  upon  his  duties,  hold  a  certificate  of  qualifications  cov- 
ering the  entire  period  of  his  employment  and  granted  by  the  Super- 
intendent of  Public  Instruction,  a  county  superintendent,  or  in  a  city 
having  a  population  exceeding  100,000  inhabitants,  by  the  Board  of 
Education." 

The  school  laws  provide  for  appointment  of  teachers  by  boards 

of  directors  and  boards  of  education  in  the  several  school  districts. 

\ 

Certificates  Imply  Continuity  in  Teaching  Profession 

In  all  districts  except  Chicago,  the  appointments  are  on  the  basis 
of  year  to  year  contracts,  but  only  teachers  holding  certificates,  issued 
with  an  implication  of  continuity  in  the  teaching  profession,  can  be 
employed. 

The  county  certificates  issued  by  county  superintendents  of  schools 
after  examinations  conducted  by  a  state  board,  are — among  others — 
as  follows:  A  third  grade  elementary  certificate  valid  for  one  year; 
a  second  grade  elementary  certificate  valid  for  two  years ;  a  third  grade 
elementary  certificate  valid  for  three  years;  and  a  high-school  certi- 


170  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

ficate  valid  for  three  years.  The  latter  three  are  "renewable  indefin- 
itely." Although  they  are  primarily  valid  only  in  the  county  of  issu- 
ance, they  can  be  indorsed  for  use  in  other  counties. 

The  state  certificates  are  granted  primarily  by  the  Superintendent 
of  Public  Instruction,  and  bring  out  more  clearly  the  idea  of  a  life 
service  in  the  teaching  profession.  These  certificates  are:  First,  a 
four  year  elementary  school  certificate ;  second,  a  four  year  high-school 
certificate;  third,  a  four  year  supervisory  certificate;  and  finally,  a 
"life  certificate."  The  provision  for  the  latter  is  that  a  four  year 
state  certificate,  of  any  of  these  classes,  at  the  time  of  its  expiration, 
shall,  upon  evidence  of  successful  teaching  or  supervision  satisfactory 
to  the  State  Superintendent  of  Public  Instruction,  "become  valid  and 
be  indorsed  for  life." 

As  to  removal,  the  boards  of  directors  and  the  boards  of  educa- 
tion have  almost  unrestricted  powers  to  dismiss  and  remove  any  teacher 
whenever,  in  their  opinion,  he  is  not  qualified  to  teach,  or  whenever, 
in  their  opinion,  the  interests  of  the  school  may  require  it. 

Express  Provision  for  Permanency  for  Chicago  Teachers 

For  teachers  of  Chicago — cities  of  over  100,000 — the  statute  reg- 
ulating the  power  of  the  Board  of  Education  both  as  to  appointments 
and  removals  provides  not  only  for  the  idea  of  continuity  in  the  teach- 
ing profession  but  explicitly  for  permanence  of  tenure  in  the  Chicago 
public  school  system.  It  calls  for  a  board  of  examiners  to  conduct 
examinations  and  prepare  eligible  lists  for  teachers  and  says  "appoint- 
ments and  promotions  of  teachers,  principals,  and  other  educational 
employes  shall  be  made  for  merit  only,  and  after  satisfactory  service 
for  a  probationary  period  of  three  years  *  *  *,  appointments  of 
teachers  and  principals  shall  become  permanent  *  *  *."  During  the 
probationary  period  the  board  may  dismiss  or  discharge  any  proba- 
tionary employe,  upon  a  recommendation  accompanied  by  the  written 
reasons  therefor,  of  the  superintendent  of  schools.  The  permanency 
of  tenure  is  subject  to  the  rules  of  the  board  concerning  conduct  and 
efficiency,  and  subject  to  removal  for  cause  in  the  manner  provided 
for  in  another  section  of  the  school  law. 

This  other  section  specifies  that  no  teacher  or  principal  appointed 
by  a  board  of  education  shall,  after  the  probationary  period  of  three 
years,  "be  removed  except  for  cause,  and  then  only  by  a  vote  of  not 
less  than  a  majority  of  all  members  of  the  board,  upon  written  charges 
presented  by  the  superintendent  of  schools,  to  be  heard  by  the  board, 
or  a  duly  authorized  committee  of  the  same,  after  thirty  days'  notice, 
with  copy  of  the  charges,  is  served  upon  the  person  against  whom 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  171 

they  are  preferred,  who  shall  have  the  privilege  of  being  present,  to- 
gether with  counsel,  offering  evidence  and  making  defense  thereto. 
At  the  request  of  any  party,  such  hearing  shall  be  public.  The  action 
and  decision  of  the  board  in  the  matter  shall  be  final." 

The  inclusion  of  this  section  limiting  removals  in  the  sections  on 
the  Chicago  teachers'  pension  fund  is  a  recognition  of  the  importance 
of  provision  for  permanence  of  tenure  in  the  service. 

Tendency  Regarding  Appointive  Officials  Is  Recognized 

The  official  is  defined  in  Webster's  dictionary  as  an  employe  hav- 
ing supervisory  duties.  The  definition  is  in  the  following  words: 
"A  person  invested  with  an  office,  especially  one  having  subordinate 
administrative  or  executive  powers  in  a  government  or  public  insti- 
tution." 

Under  various  statutes  in  Illinois  there  is  a  large  number  of  such 
appointive  officials  who  are  exempt  from  the  civil  service  laws.  Their 
appointments,  as  a  rule,  run  for  fixed  terms. 

Besides  this,  there  is  a  long  list  of  employes  in  so-called  exempt 
positions.  In  many  cases  these  are  positions  calling  for  clerical  or 
other  routine  service  similar  to  the  great  majority  of  those  that  are 
under  the  civil  service  laws. 

With  the  modern  development  of  civil  service  examinations  for 
the  higher  class  administrative  positions  and  the  general  tendency 
toward  comprehensive  civil  service  for  the  subordinate  positions  in 
the  public  service,  it  is  to  be  expected  that  as  the  years  go  by  many 
of  these  positions  of  appointive  officials  for  fixed  terms  and  appointive 
employes  for  terms  of  one  year  or  less,  will  be  put  under  the  laws 
regulating  appointrnent  on  the  basis  of  competitive  examination  of 
qualifications  and  tenure  during  good  behavior  and  efficiency. 

Under  the  constitution  and  statutes  there  is  a  large  number  of 
elective  officers  for  the  State,  its  counties  and  municipalities. 

General  Table  Shows  Positions  on  Basis  of  Tenure 

The  following  general  table  shows  the  statistics  on  appointive 
officials  and  employes  classified  as  to  the  various  tenure  acts  or  lack 
of  the  same,  and  also  statistics  on  the  elective  officers.  These  statis- 
tics are  sub-divided  by  governmental  jurisdictions  under  the  headings 
of  Metropolitan,  or  chiefly  in  Chicago,  and  State-wide,  or  chiefly  out- 
side of  Chicago. 


172 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


TABLE  I 

PUBLIC   EMPLOYES,   OFFICIALS,   AND   OFFICERS   OF   ILLINOIS   CLASSIFIED   AS 
TO  TENURE  AND  STATUS  UNDER  PRESENT  PENSION  LAWS 


- 

APPOINTIVE  OFFICIALS  AND  EMPLOYES 

ELECTIVE 
OFFICERS 

UNDER  CIVIL 
SERVICE  ACTS 

UNDER 
TEACH- 
ERS' 
ACTS 

UNDER 
FIRE 

AND 

POLICE 
COMMIS- 
SIONERS' 
ACT 

NOT 
UNDER 
PERMANENT 
TENURE 
ACTS 

UNDER 
LIM- 
ITED 
TEN- 
URE 
ACTS 

Covered  by 
Pension 
Legislation 

Not  Covered 
by  Pension 
Legislation 

Covered  by 
Pension 
Legislation 

•M 
ill 

c 
>>      o 

tP 

Tg'S.2 

Not  Covered 
by  Pension 
Legislation 

Not  Covered 
by  Pension 
Legislation 

r. 

°M 

Metropolitan  —  (Chiefly 
Within  Chicago): 
City  of  Chicago   

19,224 
407 

617 
24 
700 
12 
10 
11 
2,039 

105 
'"9 

"43 

Public  Schools 

.... 

8,269 

.... 

.... 

West  Park  System  

124 
187 
62 
1,248 

912 
1,219 
659 

South  Park  System 

21,252 
336 

2,790 
5,173* 

8,269 

.... 

.... 

3,413 

716 
2,203 
2,403 
1,802 

157 

295 

** 

782 
2,675 
1,227 

Statewide—  (Chiefly 
Outside  Chicago)  : 
State  of  Illinois 

School  Districts   

26,437 

*S69tt 

l',i52 

Cities  of  5,000  to  200,000... 
Municipalities  of  1,000  to 
5  000     

344f 

600 

Counties  of  Less  Than 
200  000 

Statewide    Totals    

1,152 

680 

5,773 

26,437 

569ft 

7,124 

4,979 

Metropolitan  and  Statewide 
Totals                 .        

21,932 

8,563 

34,706 

569ft 

1,152 

10,537 

5,136 

Total  Covered  by  Pension  Legislation — 58,359. 

Total  Appointive  Officials  and  Employes  Under  Permanent  Tenure  Legislation — 66,922. 

Total  Appointive  Officials  and  Employes — 77,459. 

Grand  Total   Public   Employes,   Appointive   Officials  and   Elective   Qfficers — 82,595ttt- 

*  Includes    certain    part    time    employes    not    considered    in    Table    VIII    on    Institution 
Teachers  and  other  State  of  Illinois  civil  service  employes. 

**Figures  on  elective  and  appointive  officers  of  school  boards  not  secured. 

f  Policemen  and  firemen  under  civil  service  act  for  cities. 

ffExcludes    196    firemen    and    148    policemen   who    are   also    under   the    civil    service    act 
for  cities. 

ftfExclusive  of  4,820  volunteer  firemen. 

Seventy-two  Cities  Should  Have  Pension  Funds  for  Firemen  and 
Policemen 

In  its  survey  the  Commission  paid  special  attention  to  the  situa- 
tion regarding  firemen's  pension  funds  and  policemen's  pension  funds 
in  cities  outside  of  Chicago.  There  are  seventy-two  cities  in  Illinois 
exclusive  of  Chicago  each  having  a  population  of  5000  up  to  100,000. 
Under  existing  state  laws  each  of  these  cities  not  only  is  empowered 
but  is  required  to  have  a  pension  fund  for  its  firemen  and  a  pension 
fund  for  its  policemen.  This  is  so  even  though  579  of  the  paid  fire- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


173 


men  and  573  of  the  policemen  in  59  of  these  cities  are  not  appointed 
under  the  permanent  tenure  acts — either  the  Fire  and  Police  Commis- 
sioners' Act  or  the  City  Civil  Service  Act,  but  have  implied  perman- 
ency of  tenure  only  through  custom.  The  59  cities  of  over  5000  in 
which  neither  the  Fire  and  Police  Commissioners'  Act  nor  the  City 
Civil  Service  Act  is  in  force  are  shown  in  Table  V  in  this  chapter. 
Only  22  cities  out  of  the  72  have  established  pension  funds  for 
their  firemen,  and  only  18  of  the  22  have  levied  taxes  for  firemen's 
funds ;  only  19  of  these  cities  have  established  pension  funds  for  their 
policemen,  and  of  the  19  only  15  have  levied  taxes  for  policemen's 
funds.  These  figures  are  the  result  of  very  thorough  work  in  gather- 
ing information  by  means  of  form  letters,  personal  follow-up  letters 
and  telegrams.  They  are  rather  striking  by  reason  of  the  fact  that 
since  1917  every  one  of  these  cities  had  been  required  by  law  not  only 
to  establish  both  firemen's  and  policemen's  pension  funds  but  also  to 
levy  taxes  for  them. 

Earlier  Laws  Required  Police  and  Fire  Funds 

Furthermore,  by  earlier  legislation  than  that  of  1917  many  of 
these  cities  had  for  many  years  been  required  to  provide  for  pensions 
for  their  policemen  and  firemen.  Since  as  far  back  as  1887,  there  has 
been  a  policemen's  pension  law  for  cities  of  (3ver  9000  inhabitants. 
It  was  in  1917  that  cities  of  from  5000  to  9000  were  included  "under 
the  requirements  to  establish  policemen's  pension  funds.  Likewise, 
since  1887  cities  of  over  50,000  have  been  under  a  state  law  calling 
for  firemen's  pension  funds;  and  for  the  ten  years  prior  to  1917, 
namely,  since  1907,  cities  of  5,000  and  over  have  been  under  a  man- 
datory law  providing  for  the  establishment  of  firemen's  pension  funds. 

The  following  table  shows  the  cities  of  5,000  to  100,000,  which 
have  complied  with  the  law  on  firemen's  and  policemen's  pension 
funds  or  either  of  such  funds: 

TA^LE  n 

FIREMEN'S    AND    POLICEMEN'S    PENSION    FUNDS    IN    OPERATION    IN    MUNI- 
CIPALITIES  OUTSIDE   OF   CHICAGO 
(Information  Chiefly  from  City  Clerks) 


MUNICIPALITY 

«£ 

fa 

_    .    'Z  Q 
W  «  W  * 

&<£* 

x  o  sj  2 
H 

og 

is, 

2  <  w 
•3  PH  3 

55 

* 
M  w  D 

J^fL, 

oSgg 

NUMBER 
OF  POLICE- 
MEN 

Aurora     

Yes 

Yes 

31 

Yes 

Yes 

38 

Bloomington     

Yes 

Yes 

30 

Yes 

Yes 

28 

Blue  Island    .  .    . 

No 

No 

5* 

Yes 

10 

Canton     .    .                       / 

Yes 

No 

7 

No 

No 

4t 

Champaign    

Yes 

Yes 

9 

No 

No 

10t 

Chicago  Heights   .... 

No 

No 

19* 

Yes 

Yes 

21 

Decatur  

Yes 

No 

39 

Yes 

Yes 

32 

174 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


TABLE  II— CONTINUED 

FIREMEN'S    AND    POLICEMEN'S    PENSION    FUNDS    IN    OPERATION    IN    MUNI- 
CIPALITIES  OUTSIDE   OF   CHICAGO 
(Information   Chiefly   from   City   Clerks) 


MUNICIPALITY 

FIREMEN'S 
FUND 

g«£g 

S£pH& 
%*»* 

•J'asss 

o  W  0 

t°™ 

Jl 

hi 

& 

POLICEMEN'S 
PENSION 
FUND 

sSll 

>£«fo 
^gs§ 

*2sK 

NUMBER 
OF  POLICE- 
MEN 

De  Kalb   

Yes 

No 

7 

Yes 

No 

5 

Yes 

Yes 

82 

Yes 

Yes 

85 

Elgin    .. 

Yes 

Yes 

27 

Yes 

Yes 

21 

Evanston     

Yes 

Yes 

30 

Yes 

Yes 

32 

Yes 

Yes 

21 

No 

No 

13t 

Joliet          .            •  . 

Yes 

Yes 

27 

Yes 

No 

26 

Kankakee 

Yes 

Yes 

12 

Yes 

Yes 

13 

Moline     

Yes 

Yes 

15 

No 

Yes 

21t 

Oak  Park   

Yes 

Yes 

24 

Yes 

Yes 

25 

Yes 

Yes 

85 

Yes 

No 

85 

Yes 

Yes 

50 

Yes 

Yes 

39 

Yes 

Yes 

27 

Yes 

Yes 

18 

Yes 

Yes 

67 

Yes 

Yes 

45 

Yes 

No 

77 

Yes 

No 

49 

Yes 

Yes 

2 

Yes 

3 

Yes 

Yes 

6 

No 

No 

4f 

Yes 

Yes 

13 

Yes 

Yes 

12 

24    Cities    

Yes  22 

Yes  18 

712* 

Yes  19 

Yes  15 

639f 

*  24  in  Blue  Island  and  Chicago  Heights  reporting  firemen's  pension  funds  not  estab- 
lished. 

t  52  in  Canton,  Champaign,  Freeport,  Moline  and  Urbana  reporting  policemen's  pension 
funds  not  established. 

Cities  Failing  to  Comply  With  Pension  Laws 

Fifty  cities  have  not  complied  with  the  law  to  establish  firemen's 
pension  funds.  These  cities  and  the  numbers  in  their  paid  fire  de- 
partments are  shown  in  the  following  table: 

TABLE  III 

MUNICIPALITIES  OF  OVER  5,000  IN  POPULATION  IN  WHICH  FIREMEN'S  FUNDS 
REQUIRED  BY  LAW  HAVE  NOT  BEEN  ESTABLISHED 


NUMBER  OF 
MUNICIPALITY  PAID  FIREMEN 

Alton   23 

Beardstown    1 

Belleville     17 

Belvidere     8 

Berwyn      4 

Blue  Island    5 

Cairo    21 

Carbondale   — 

Centralia 1 

Charleston     2 

Chicago    Heights    19 

Cicero     56 

Clinton    3 

Collinsville     2 

Danville    31 

Dixon     5 

Duquoin    0 

Edwardsville 2 

Forest    Park    2 

Galesburg    15 

Granite  City 6 

Harrisburg    0 

Harvey     i 4 

Herrin 2 

Jacksonville    11 

Kewanee    6 


NUMBER  OF 
MUNICIPALITY  •        PAID  FIREMEN 

La    Grange    0 

LaSalle    25 

Lincoln     5 

Litchfield    2 

Macomb 8 

Madison    1 

Marion 2 

Mattoon    8 

Maywood    7 

Monmouth    4 

Mt.  Carmel 1 

Mt.   Vernon    6 

Murphysboro 3 

Olney 0 

Ottawa 5 

Pana     — 

Paris     5 

Pekin     4 

Peru     12 

Pontiac    11 

Spring  Valley   1 

Staunton     0 

Sterling 5 

Streator     10 

Totals,    50  Cities,   371   Paid  Firemen. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


175 


Fifty-three  cities  have  failed  to  comply  with  the  requirement  of 
establishing  pension  funds  for  their  policemen.  These  cities  and  the 
numbers  of  men  in  their  police  departments  are  shown  in,  the  follow- 
ing table: 

TABLE  IV 

MUNICIPALITIES    OF    OVER    5,000    IN    POPULATION    IN    WHICH    POLICEMEN'S 
PENSION  FUNDS  REQUIRED  BY  LAW  HAVE  NOT  BEEN  ESTABLISHED 


NUMBER  OF 
MUNICIPALITY  POLICEMEN 

Alton   18 

Beardstown 5 

Belleville     16 

Belvidere     6 

Berwyn      5 

Cairo     20 

Canton     4 

Carbondale   2 

Centralia     6 

Champaign    10 

Charleston     4 

Cicero    50 

Clinton    2 

Collinsville     7 

Danville     22 

Dixon     5 

Duquoin    3 

Edwardsville    5 

Forest    Park    14 

Freeport 13 

Galesburg    13 

Granite    City    12 

Harrisburg     3 

Harvey    4 

Herrin    5 

Jacksonville    10 

Kewanee     5 

LaGrange     3 


NUMBER  OF 
MUNICIPALITY  POLICEMEN 

LaSalle    10 

Lincoln     6 

Litchfield     2 

Macomb 3 

Madison    8 

Marion     3 

Mattoon     8 

Maywood    3 

Moline 21 

Monmouth    7 

Mt.   Carmel    2 

Mt.  Verribn   4 

Murphysboro    6 

Olney 2 

Ottawa    9 

Pana    2 

Paris    4 

Pekin     7 

Peru 7 

Pontiac    3 

Spring    Valley     3 

Staunton     4 

Sterling     5 

Streator     14 

'  Urbana    4 

1     53  Cities  419 


The   foregoing  information  is  assembled  in  the  following  table 
for  the  whole  list  of  72  cities: 


TABLE  v 

SEVENTY-TWO    CITIES   UNDER   MANDATORY   LAWS    FOR   POLICEMEN'S   AND 

FIREMEN'S  PENSION  FUNDS 


CITY 

POPU- 
LATION 

K 
o 

y 

m 

CIVIL 
SERVICE 
COMMISSION 

K 

« 

3 

o  w 

& 

FIREMEN'S 
PENSION 
FUND 

><  w 

ft. 

m 

POLICE- 
MEN 

2  Q 
.fi| 
k* 

n  fc  & 

o  w  o 
£S55 

|j 

i38.fi 

X  3  fc 

<  o  w 
HPkS 

Alton     

17  528 

No 

No 

23 

No 

No 

18 

No 

No 

Aurora    

29  807 

1903 

No 

31 

Yes 

Yes 

38 

Yes 

Yes 

Beardstown    
Belleville 

6,107 
21  122 

No 
No 

No 
No 

1 
17 

No 
No 

No 
Nn 

5 
16 

No 
No 

No 
No 

Belvidere 

7  253 

No 

No 

g 

No 

No 

6 

No 

No 

Berwyn  .    . 

5  841 

No 

No 

4 

No 

No 

5 

No 

No 

Bloomington     .... 
Blue  Island   

25,768 
8,043 
14  548 

No 
No 

No 
No 
No 

30 
5 
21 

Yes 

No 
No 

Yes 
No 
No 

28 
10 
20 

Yes 
Yes 

No 

Yes 
Yes 

No 

10*453 

No 

No 

7 

Yes 

No 

4 

No 

No 

Carbondale 

5  411 

No 

No 

No 

No 

2 

No 

No 

Centralia    

9  680 

No 

No 

1 

No 

No 

5 

No 

No 

Champaign     

12,421 
5  884 

1918 
No 

1906 
No 

9 

2 

Yes 

No 

Yes 

No 

10 

4 

No 
No 

No 
No 

Chicago  Heights   . 
Cicero     

14,524 
14  557 

No 
No 

No 
No 

19 
56 

No 
No 

No 
No 

21 
50 

Yes 

No 

Yes. 
No 

5  165 

No 

No 

3 

No 

No 

2 

No 

No 

Collinsville     
Danville 

7',478 
27  871 

No 
No 

No 
No 

2 
31 

No 
No 

No 

7 
22 

No 
No 

No 

Decatur     

31,140 

No 

No 

39 

Yes 

No 

32 

Yes 

Yes 

176 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


TABLE   V— CONTINUED 

SEVENTY-TWO    CITIES    UNDER    MANDATORY    LAWS    FOR    POLICEMEN'S    AND 
FIREMEN'S    PENSION    FUNDS 


CITY 

POPU- 
LATION 

FIRE  AND 
POLICE 
COMMISSION 

J 

gia 

«  3  o 

(JC/2O 

PAID 
FIREMEN 

tn 

Is 

1M 

£££ 

% 

•*  Q 

3«§ 

Hfe&H 

POLICE- 
MEN 

§§ 

«*£ 

u.w 

n"fc  fc 

0  W  O 

fr  SSJ 

£  i 
sf. 

ais 

DeKalb   

8  102 

No 

No 

7 

Yes 

No 

5 

Yes 

Nn 

Dixon        ... 

7  216 

No 

No 

5 

No 

Nn 

Nn 

Nn 

Duquoin    

5  454 

No 

No 

0 

No 

No 

Nn 

Nn 

E.  St.   Louis   .... 
Edwardsville   
Elgin     ... 

58,547 
5,014 
25  976 

1909 
No 
1903 

No 
No 
No 

82 
2 
27 

Yes 
No 
Yes 

Yes 
No 
Yes 

85 
5 
21 

Yes 
No 
Yeo 

Yes 

No 

YPQ 

Evanston    .... 

24  978 

1908 

1897 

30 

Yes 

Yes 

32 

Yes 

Yes 

Forest    Park    
Freeport 

6,594 
17  567 

No 
1913 

No 
No 

2 
21 

No 
Yes 

No 
Yes 

14 
1  1 

No 
No 

No 

Nn 

Galesburg     .    .  . 

22  089 

No 

No 

15 

No 

No 

13 

No 

No 

Granite  City    

9,903 
5  309 

No 
No 

No   ' 
No 

6 

Q 

No 
No 

No 

No 

12 

No 

Nn 

No 

Nn 

Harvey   

7  227 

No 

No 

4 

No 

No 

4 

No 

No 

Herrin     

6  861 

No 

No 

2 

No 

No 

5 

No 

No 

Jacksonville     .... 
Toliet 

15,326 
34  670 

No 
1907 

No 
No 

11 

27 

No 
Yes 

No 
Yes 

10 
26 

No 
Yes 

No 
Nn 

Kankakee    

13  986 

No 

No 

12 

Yes 

Yes 

13 

Yes 

Yes 

Kewanee     

9  307 

No 

No 

6 

No 

No 

5 

No 

No 

La    Grange    . 

5,282 

No 

No 

o 

No 

No 

3 

No 

No 

La    Salle    .. 

11  537 

No 

No 

25 

No 

No 

10 

No 

No 

Lincoln     

10  892 

No 

No 

5 

No 

No 

g 

No 

No 

Litchfield    

5,971 

No 

No 

2 

No 

No 

2 

No 

No 

Macomb    . 

5  774 

No 

No 

8 

No 

No 

3 

No 

No 

Madison      

5  046 

No 

No 

1 

No 

No 

g 

No 

No 

Marion    

7,093 

No 

No 

2 

No 

No 

3 

No 

No 

Mattoon    

11,456 

No 

No 

8 

No 

No 

8 

No 

No 

Maywood   .  . 

8  033 

No 

No 

7 

No 

No 

3 

No 

No 

Moline     

24  199 

No 

No 

15 

Yes 

Yes 

21 

No 

Yes 

Monmouth      

9,128 

No 

No 

4 

No 

No 

7 

No 

No 

Mt.    Carmel     .... 
Mt.    Vernon    
Murphysboro     .  .  . 
Oak    Park 

6,934 
8,007 
7,485 
19  444 

No 
No 
No 
No 

No 
No 
No 
No 

1 
6 

3 
24 

No. 
No 
No 
Yes 

No 
No 
No 
Yes 

I 

25 

No 
No 
No 
Yes 

No 

No 
No 
Yes 

Olney                .... 

5  Oil 

No 

No 

o 

No 

No 

2 

No 

No 

Ottawa    

9  535 

No 

No 

5 

No 

No 

9 

No 

No 

Pana 

6  055 

No 

No 

No 

No 

2 

No 

No 

Paris 

7  664 

No 

No 

5 

No 

No 

4 

No 

No 

Pekin    

9  897 

No 

No 

4 

No 

No 

7 

No 

No 

Peoria     

66,950 

1910 

No 

85 

Yes 

Yes 

85 

Yes 

No 

Peru 

7  984 

No 

No 

12 

No 

No 

7 

No 

No 

Pontiac   

6  090 

No 

No 

11 

No 

No 

3 

No 

No 

Quincy    
Rock     Island     .  .  . 
Rockford 

36,587 
24,335 
45  401 

No 
1903 

No 
No 
1903 

50 
27 
67 

Yes 
Yes 
Yes 

Yes 
Yes 
Yes 

39 
18 

45 

Yes 
Yes 
Yes 

Yes 
Yes 

Yes 

Spring    Valley    .  . 
Springfield     

7,035 
51,678 
5  048 

1911 
1910 
No 

No 
1907 
No 

1 
77 

o 

No 
Yes 

No 

No 
No 

No 

3 
49 
4 

No 

Yes 
No 

No 
No 
No 

Sterling    

7,467 

No' 

No 

5 

No 

No 

5 

No 

No 

Streator 

14  253 

1910 

No 

10 

No 

No 

14 

No 

No 

Taylorville     
Urbana     

5,446 
8,245 

No 

No 

2 
6 

Yes 
Yes 

Yes 
Yes 

3 
4 

Yes 
No 

No 

16  069 

1906F 

1910 

13 

Yes 

Yes 

12 

Yes 

Yes 

1916P 

Totals     

13  Yes 

5  Yes 

1059 

22  Yes 

18  Yes 

1006 

19  Yes 

15  Yes 

Supreme  Court  Sustains  Mandatory  Law 

These  failures  have  not  been  due  to  any  invalidity  in  the  laws. 
This  was  shown  in  the  Quincy  case,  decided  by  the  Supreme  Court 
of  Illinois  in  1916.  In  that  city  the  municipal  authorities  refused  to 
make  provision  for  a  policemen's  pension  fund.  Two  veteran  mem- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  177 

bers  of  the  police  force  eligible  for  pensions  brought  suit  against  the 
city  for  their  pensions.  The  case  was  that  of  the  People  ex  rel  v. 
Abbott.  The  city  contested  the  suit.  It  went  to  the  Supreme  Court 
of  the  State.  All  the  questions  involved  were  submitted  and  con- 
sidered. The  Court  sustained  the  act,  and  ordered  the  city  to  pay 
the  pensions. 

Small  City  Force  Not  Large  Enough  for  a  Sound  Fund, 

There  is,  however,  a  very  good  and  practical  reason  why  these 
cities  have  failed  to  observe  the  law  to  provide  for  pensions  for  their 
policemen  and  firemen.  It  is  that  the  number  of  men  in  either  the 
fire  department  or  the  police  department  is  too  small  standing  alone 
to  afford  a  basis  for  establishing  a  sound  pension  fund.  Each  of  these 
forces  is  many  times  too  small  for  the  law  of  averages  as  to  expecta- 
tion of  life  to  be  applied  to  it.  The  force  in  each  case  is  so  small 
that  all  its  members  going  on  a  pension  roll,  for  example  at  age  55, 
might  live  far  beyond  the  \7l/2  years  which  is  the  average  additional 
duration  of  life  for  persons  arriving  at  that  age,  and  the  average 
period  for  which  a  retirement  annuity  must  be  financed. 

At  the  public  hearings  held  by  the  Commission,  spokesmen  for 
some  of  the  cities  of  from  5,000  to  100,000,  where  policemen's  funds 
have  been  established,  said  that  their  funds  were  not  in  such  shape 
as  to  permit  the  retirement  on  pension  of  men  eligible  to  retire. 
Consolidation  of  Small  Funds  Is  Proposed 

For  these  reasons  the  Commission  is  recommending  that  all  of 
the  firemen's  funds  called  for  in  the  72  cities  of  over  5,000  outside 
of  Chicago  be  consolidated  in  a  statewide  firemen's  pension  fund 
under  the  proposed  Standard  Plan,  that  likewise  all  of  the  police- 
men's funds  called  for  in  these  cities  be  consolidated  in  a  statewide 
policemen's  pension  fund,  and  that  these  two  statewide  funds  be  linked 
through  a  central  state  board  of  pension  trustees  to  an  equalization 
fund  designed  to  take  care  of  variations  from  the  average  in  the  risks 
for  all  of  the  pension  funds  in  the  State — both  those  in  Chicago  and 
the  statewide  funds. 

All  of  this  is  explained  more  fully  in  the  actuarial  chapter  on 
consolidation  of  small  funds,  for  which  chapter  there  were  gathered 
in  the  survey  detailed  figures  from  these  cities  on  the  policemen  and 
the  firemen,  their  ages,  salary  experiences  and  many  other  subjects 
needed  for  the  work  of  the  actuary. 


178  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Volunteer  Firemen  and  Provision  for  Disability 

There  is  a  wide  demand  in  the  State  that  some  public  provision 
be  required  by  law  for  volunteer  firemen  disabled  in  the  performance 
of  duty — going  to  fires,  at  fires  or  on  the  return  from  fires.  As  shown 
in  the  table  at  the  end  of  this  chapter  there  are  4,807  volunteer  fire- 
men in  the  cities  of  1,000  to  100,000.  The  demand  made  on  their 
behalf  contemplates  allowances  to  the  disabled  fireman  while  unable 
to  work  at  trie  occupation  by  which  he  earns  his  living,  and  also  allow- 
ances to  his  dependents  in  case  of  death,  or  disability  resulting  in  death, 
due  to  the  performance  of  duty. 

The  Commission  has  received  a  petition  on  this  subject  from  the 
Illinois  Firemen's  Association,  and  letters  from  fire  departments  in 
very  many  small  municipalities.  The  Commission  has  given  the  sub- 
ject such  consideration  as  the  demands  on  its  time  for  its  major  work 
have  permitted,  but  was  not  able  to  collect  sufficient  data  on  disabili- 
ties among  volunteer  firemen  to  afford  actuarial  calculations  and  con- 
clusions such  as  would  be  required  for  providing  for  disability  ben- 
efits for  volunteer  firemen  on  a  sound  basis.  The  Commission  has 
concluded  therefore  that  it  cannot  recommend  such  provision  in  the 
proposed  Standard  Plan.  The  Commission,  however,  is  of  the  opinion 
that  the  hazards  of  disability  and  death  which  the  volunteer  firemen 
have  to  face  deserve  consideration  by  the  General  Assembly. 

Employes  Other  Than  Policemen  and  Firemen  in  Downstate  Cities 

Statistics  on  employes  other  than  policemen  and  firemen,  and  so- 
called  appointive  officials,  in  cities  and  villages  of  5,000  to  100,000  were 
gathered  by  the  Commission.  Not  all  of  the  cities  replied  to  the  ques- 
tions on  such  employes,  as  shown  by  the  blanks  in  Table  XIV  at  the 
end  of  this  chapter.  But  most  of  them  did.  The  information  gath- 
ered shows  2,022  such  employes  in  these  cities.  Of  this  number  only 
600,  being  the  total  for  five  cities,  are  appointed  under  the  civil  ser- 
vice law.  These  are  shown  in  Table  VI  as  follows: 

TABLE   VI 

CITIES  OF  FROM  5,000  to  100,000  IN  POPULATION  WHICH  HAVE  ADOPTED 
THE  CIVIL  SERVICE  ACT  OF  1895  AND  THE  NUMBER  OF  EMPLOYES  OTHER 
THAN  FIREMEN  AND  POLICEMEN  IN  SUCH  CITIES. 

CITY  NUMBER  OF  EMPLOYES 

Champaign     14 

Evanston     201 

Rockford 118 

Springfield    218 

Waukegan _S< 

5  Cities   600 

It  was  found  that  1,422  employes  other  than  policemen  and  fire- 
men, in  addition  to  866  appointive  officials,  are  not  appointed  under 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


179 


any  law  or  custom  assuring  permanency  of  tenure  or  long-continued 
service.  That  there  is  some  demand  for  pensions  for  employes  other 
than  policemen  and  firemen  in  such  of  these  cities  as  already  have 
policemen's  and  firemen's  pension  funds  was  indicated  by  an  inquiry 
by  the  corporation  counsel  of  one  of  these  cities  at  the  public  hearings 
held  by  the  Commission.  It  is  the  opinion  of  the  Commission,  how- 
ever, that  a  prerequisite  to  providing  for  pensions  is  a  provision  of 
law  or  a  custom  assuring  continuity  in  service. 

It  is  of  course  true  that  under  the  refund  provisions  of  the  pro- 
posed Standard  Plan  employes  in  service  only  a  few  years  through 
appointment  other  than  under  a  permanent  tenure  act  could  be  re- 
quired to  contribute  toward  a  pension  system  without  injustice,  but 
we  do  not  think  that  the  public  favors  pensions  for  employes  whose 
tenure  is  not  on  a  permanent  basis  and  who  are  not  likely  to  give  what 
amounts  to  a  working-lifetime  of  service  to  the  public. 

The  statistics  on  the  employes  other  than  policemen  and  firemen 
in  the  cities  of  5,000  to  100,000  outside  of  Chicago  are  shown  in  Table 
VII  as  follows : 

TABLE  VII 

EMPLOYES    OTHER    THAN    POLICEMEN,    FIREMEN    AND    APPOINTIVE    OF- 
FICIALS  IN   CITIES    OF   5,000   TO    100,000. 

CITY                                                EMPLOYES  CITY                                                EMPLOYES 

Alton   6  Kewanee   40 

Aurora 250  LaGrange    4 

Beardstown   LaSalle    25 

Belleville 25  Lincoln    14 

Belvidere Litchfield   

Berwyn 15  Macomb     

Bloomington    48  Madison    3 

Blue  Island '. 15  Marion    

Cairo    26  Mattoon 8 

Canton    Maywood  9 

Carbondale    2  Moline 52 

Centralia    12  Monmouth    14 

Champaign    14  Mt.    Carmel    1 

Charleston     10  Mt.   Vernon   13 

Chicago  Heights   Murphysboro    6 

Cicero    130  Oak  Park    

Clinton   10  Olney     

Collinsville     15  Ottawa    7 

Danville   Pana    

Decatur   30  Paris    3 

DeKalb    10  Pekin   6 

Dixon    2        >      Peoria    90 

Duquoin    0  Peru     6 

East    St   Louis    Pontiac    3 

Edwardsville    20  Quincy     40 

Elgin    63  Rock    Island    60 

Evanston     200  Rockford     118 

Forest  Park   15  Spring  Valley    0 

Frceport    3  Springfield    218 

Galesburg    84  Staunton   9 

Granite    City    Sterling     25 

Harrisburg   2  Taylorville    

Harvey    3  Urbana    

Herrin   ; Waukegan    50 

Jacksonville    28 

L0116.1  , .- 140  Total    2,022 

Kankakee    20 


180  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

State  Institution  Teachers  and  Other  State  Employes 

The  only  employes  directly  in  the  service  of  the  State  who  now 
have  a  pension  fund  are  the  teachers  in  the  State  institutions — the 
charitable  and  reformatory  institutions,  and  the  educational  institu- 
tions excepting  the  University  of  Illinois.  For  them  the  State  In- 
stitution Teachers'  Pension  and  Retirement  Fund  was  established  by 
a  law  passed  in  1917.  Although  their  fund  is  administered  by  the 
same  trustees  as  is  the  general  State  Teachers'  Pension  and  Retire- 
ment Fund  the  institution  teachers  were  not  included  in  the  latter  fund 
because  the  moneys  for  their  salaries  and  for  the  State's  contributions 
toward  their  pensions  are 'derived  from  State  appropriations  from  the 
general  revenues,  whereas  the  money  for  the  teachers  in  the  public 
schools  comes  from  the  State  school  fund. 

It  would  seem  that  when  State  employes  other  than  the  institu- 
tion teachers,  namely  the  other  employes  in  the  charitable  and  re- 
formatory institutions  of  the  Department  of  Public  Welfare,  and  the 
clerical  and  other  employes  of  all  the  other  departments  are  brought 
under  a  pension  fund,  it  should  be  through  a  grouping  with  the  State 
institution  teachers.  The  Commission  received  a  letter  from  the  Di- 
rector of  the  Department  of  Public  Welfare  quoting  officers  of  his 
department  as  being  of  the  opinion  that  it  would  promote  the  efficiency 
of  the  department  to  have  all  of  its  employes  given  the  benefit  of  a 
pension  system. 

For  All  State  Employes  in  One  Fund 

The  Commission  recommends  that  whenever  the  proposal  for  a 
pension  system  for  all  the  State  institutions  and  department  employes 
is  pressed  aggressively,  they  be  brought  under  the  proposed  Standard 
Plan  through  a  merger  with  the  State  Institutions  Teachers'  Fund. 

In  its  survey  the  Commission  gathered  1918  data  on  the  Institu- 
tion Teachers'  Fund,  most  of  which  has  been  used  in  another  chapter 
on  the  actuarial  situation  as  to  that  fund. 

As  to  statistics  on  others  in  the  State  service  the  Commission  re- 
cast the  figures  of  the  report  of  the  Pension  Laws  Commission  of  1916, 
written  when  employment  conditions  in  the  State  service  were  more 
nearly  normal.  The  following  table  gives  the  statistics  on  the  State 
Institution  Teachers  and  other  State  employes. 

TABLE  VIII 

INSTITUTIONS'  TEACHERS  AND  OTHER   STATE   OF  ILLINOIS   CIVIL  SERV- 
ICE EMPLOYES. 

Normal   Schools  Listed   with   Departments  in   1916 234 

Institutions    Listed    with    Institutions    in    1916 102 

336 

Department    Employes    Other    than    Institutions'    Teachers 962 

Institutions'    Employes    Other    than    Institutions'    Teachers 3963 

Total    .  5261 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  181 

Peoria  Teachers  and  State  Teachers  Funds 

There  are  in  the  Peoria  public  school  system  437  teachers.  This 
was  the  number  shown  in  the  report  of  the  Illinois  Pension  Laws  Com- 
mission of  1916,  dealing  with  the  separate  pension  fund  of  the  Peoria 
teachers  established  under  a  law  for  school  districts  of  from  10,000 
to  100,000  in  population.  This  number  of  employes'  is  too  small 
standing  alone  for  the  establishment  of  a  sound  pension  fund  accord- 
ing to  actuarial  principles.  The  condition  of  the  Peoria  teachers'  fund 
is  discussed  in  another  chapter  of  this  report. 

The  Commission's  recommendation  is  that  under  the  Standard 
Plan  the  Peoria  teachers'  fund  be  merged  with  the  State  Teachers' 
Pension  and  Retirement  Fund,  all  equities  involved,  of  course,  to  be 
duly  safeguarded. 

It  appears  that  hitherto  the  Peoria  teachers  have  opposed  being 
merged  into  the  State  Teachers'  Pension  and  Retirement  Fund  because 
of  a  recognition  on  their  part  that  while  their  own  fund  is  compara- 
tively small  the  present  law  for  the  State  Teachers'  Pension  and  Re- 
tirement Fund  does  not  make  adequate  provision  for  ultimate  pay- 
ment of  the  pensions  it  promises  to  the  present  generation  of  teachers. 

Statistics  on  the  State  Teachers'  Pension  and  Retirement  Fund 
were  received  by  the  Commission  from  Mr.  R.  O.  Clarida,  Secretary 
of  its  board  of  trustees.  These  were  as  of  March  1,  1919.  They  show 
the  following  on  number  of  contributors: 

Elective  Contributors  (Approximate  Number) 1,706 

Compulsory  Contributors  (Approximate  Number) ....  16,500 

These  figures  are  suggestive  of  comment  when  taken  in  connec- 
tion with  the  total  estimated  number  of  public  school  teachers  in  Illi- 
nois outside  of  Chicago  and  Peoria,  as  derived  from  Federal  census 
statistics  given  in  the  Illinois  Blue  Book.  That  estimated  number  is 
26,000.  The  difference  between  26,000  and  16,500,  the  number  of 
compulsory  contributors,  is  9,500,»  which  would  appear  to  be  the  total 
number  of  teachers  eligible  to  be  elective  contributors  in  the  state- 
wide teachers'  pension  fund.  Since  there  are  1,706  elective  contribu- 
tors it  appears  that  7,794  teachers  eligible  to  become  elective  contri- 
butors under  the  present  statewide  teachers'  pension  and  retirement 
law  have  not  done  so. 

Small  Funds  and  Large  Funds  in  Chicago 

Besides  the  large  pension  funds  in  Chicago,  namely  those  of  the 
Municipal  Employes,  the  Public  School  Teachers,  the  City  Firemen 


182  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

and  the  City  Policemen,  there  are  three  small  funds  that  derive  part 
of  their  revenues  from  the  City.  These  are  the  Fund  of  the  Public 
School  Employes  other  than  teachers,  the  Public  Library  Employes' 
Fund,  and  the  House  of  Correction  Fund.  The  statistics  on  the  num- 
ber of  employes  in  each  of  these  groups,  given  below,  shows  that  each 
is  too  small  for  the  law  of  averages  to  apply  as  to  mortality  expecta- 
tions and  therefore  too  small  for  a  separate  pension  fund  if  it  is  to 
be  a  sound  and  enduring  fund.  This  point  is  developed  in  other  parts 
of  this  report. 

Consolidation  With  Municipal  Fund  Is  Urged 

In  its  recommendations  for  consolidations,  the  Commission 
strongly  urges  that  these  three  funds  be  merged  under  the  Standard 
Plan  with  the  Municipal  Employes'  Fund.  This  could  be  done  equit- 
ably, with  the  result  that  the  employes  in  the  three  funds  that  are 
too  small  ever  to  be  on  a  sound  basis  unless  unreasonably  large  con- 
tributions of  public  money  are  appropriated  for  them,  would  be  in  a 
large  fund,  and  that  the  largest  of  the  merged  funds  would  be  made 
still  larger  and  thus  more  readily  put  on  a  sound  basis  assuring  per- 
manency. 

The  figures  on  employes  in  the  Chicago  city  funds,  as  shown  by 
the  report  of  the  Illinois  Pension  Laws  Commission  of  1916,  are  as 
follows : 

TABLE   IX 
EMPLOYES   IN   SMALL  PENSION   FUNDS   AND   LARGE   PENSION   FUNDS   IN 

CHICAGO. 

SMALL  FUNDS — 

Public    School    Employes    407 

Public  Library   Employes    290 

House    of    Correction    Employes 92 

789 

LARGE  FUNDS — 

Municipal     Employes     5003 

Public  School   Teachers    V. 7754 

Policemen      4830 

Firemen     1973       19560 


Total : 20349 

Park  Services  in  Chicago — Present  and  Proposed  Funds 

In  the  three  large  park  systems  -in  Chicago  there  are  a  total  of 
3163  employes.  Of  the  latter  figure,  373  are  policemen,  and  2790  are 
other  than  policemen.  Except  for  a  very  few  in  exempt  positions 
all  of  these  employes  hold  their  places  under  the  civil  service  law  for 
park  districts  of  over  150,000  population. 

The  distribution  of  these  employes  between  the  three  systems, 
by  classes  of  service  is  shown  in  the  following  table: 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


183 


TABLE   X 
PARK  SERVICES  IN  CHICAGO 


PARK   SYSTEM 

POLICEMEN 

CIVIL   SERVICE   EMPLOYES 
OTHER  THAN   POLICEMEN 

West  Park                                                      

124 

912 

South    Park                 .  .            .        

187 

1219 

62 

659 

373 

2790 

3163 

For  Consolidating  the  Park  Policemen's  Pension  Funds 

Each  of  these  park  systems  has  a  pension  fund  for  its  policemen. 
But  as  is  shown  in  another  chapter  dealing  with  the  actuarial  aspects 
of  the  situation  the  group  of  policemen  in  each  case  is  too  small  for 
a  sound  fund.  The  Commission  therefore  recommends  that  the  three 
park  police  pension  funds  in  Chicago  be  merged  in  one  fund  under  the 
Standard  Plan.  Moreover,  it  recognizes  that  if  as  a  result  of  the  consti- 
tutional convention  Chicago  gets  a  new  charter  consolidating  the  gov- 
ernments of  the  park  systems  with  the  government  of  the  city,  the  park 
policemen  could  naturally  be  merged  with  the  city  police  department, 
and  the  park  police  pension  funds  with  the  city  police  pension  funds. 

Proposed  Fund  for  Park  Employes  Other  Than  Policemen 

From  committees  representing  the  park  employes  other  than  po- 
licemen, in  the  three  large  park  systems  of  Chicago,  the  Commission 
has  received  petitions  for  assistance  in  bringing  about  the  establish- 
ment of  a  pension  system.  There  is  a  well-defined  and  well-organized 
movement  among  these  2,790  employes  to  secure  sueh  pension  legis- 
lation at  the  present  session  of  the  General  Assembly.  This  was 
brought  out  clearly  at  the  special  public  hearing  on  proposed  funds 
for  park  employes  other  than  policemen,  held  by  the  Commission  on 
March  10,  1919.  Spokesmen  for  these  employes — the  West  Park  sys- 
tem, the  Lincoln  Park  system,  and1  the  South  Park  system— asked  that 
a  fund  for  their  group  be  included  in  the  proposed  Standard  Plan  as 
outlined  and  expounded  at  the  hearing. 

The  Commission  announced  in  reply  that  it  had  adopted  the  policy 
of  recommending  that  groups  of  public  employes  not  now  having 
pension  funds  be  included  at  the  outset  under  the  Standard  Plan  for 
a  comprehensive  system  of  pension  funds  only  in  case  the  employing 
bodies  concerned,  as  well  as  the  employes,  join  in  a  request  for  such 
action. 

Within  the  next  few  days  the  associations  of  employes  in  the 
three  park  systems  petitioned  the  respective  boards  of  commissioners 

J3 


184  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

constituting  the  employing  bodies  of  the  park  systems,  and  those  boards 
adopted  resolutions  approving  the  petitions  of  the  employes.  The  Com- 
mission has  been  formally  advised  of  these  actions,  such  notifications 
having  come  from  the  clerk  of  the  Board  of  West  Chicago  Park  Com- 
missioners, the  secretary  for  the  Commissioners  of  Lincoln  Park,  and 
the  secretary  of  the  South  Park  Commissioners. 

The  character  of  the  petitions  from  the  employes  to  the  three 
park  boards  is  shown  by  the  following  communication  submitted  under 
date  of  March  11,  1919: 

"West  Chicago  Park  Commissioners, 
Union  Park,  Chicago. 
Gentlemen : 

"The  employes  of  the  West  Parks  have  organized  and  joined  hands  with 
the  South  Park  and  Lincoln  Park  employes,  for  the  purpose  of  having  a  Pension 
Act  passed  at  this  session^  of  the  Legislature  whereby  the  employes  may  become 
participants. 

"This  cannot  be  accomplished  without  the  aid  and  support  of  our  em- 
ployers, and  as  the  trend  of  the  times  in  public  service  seems  to  run  toward 
pension  for  employes,  we  earnestly  solicit  your  co-operation  and  support,  and 
we  do  hereby  request  that  your  Honorable  Body  go  on  record  at  this  or  at  your 
next  meeting,  supporting  such  a  movement. 

"Accompanying  this  letter  is  a  pamphlet  published  by  the  State-Wide  Pen- 
sion Commission,  appointed  by  his"  Honor,  Governor  Frank  O.  Lowden.  This 
pamphlet  sets  forth  the  provisions  under  which  the  Act,  to  be  presented  to  the 
Legislature,  will  be  drafted  by  the  State-Wide  Commission  for  us. 

"Awaiting  your  approval  and  support,  we  remain 

"WEST  PARK  EMPLOYES'  BENEFIT  ASSOCIATION." 

The  resolution  adopted  on  the  same  day  by  the  Board  of  West 
Chicago  Park  Commissioners  was  as  follows: 

"WHEREAS,  The  employes  of  the  West  Park  System  have  sought  the  con- 
sent and  approval  of  their  endeavors  to  co-operate  with  the  employes  of  the 
Lincoln  Park  and  South  Park  Systems  in  obtaining  the  passage  of  a  compre- 
hensive pension  act  for  municipal  employes  by  the  State  Legislature  of  Illinois ; 
therefore, 

"BE  IT  RESOLVED.  That  the  Board  of  West  Chicago  Park  Commissioners 
hereby  approve  of  and  consent  to  the  participation  of  its  employes  in  said  pro- 
posed Pension  Act  or  acts." 

On  March  12,  1919,  the  Commissioners  of  Lincoln  Park  took  up 
the  matter  of  pensions  for  park  employes  and  "It  was  moved,  seconded 
and  adopted  that  if  the  West  and  South  Park  Systems  approve  of 
the  passing  of  such  a  bill  by  the  Legislature,  the  Commissioners  of 
Lincoln  Park  will  concur." 

The  South  Park  Commissioners,  at  a  regular  meeting  March  19, 
took  up  for  consideration  "the  matter  of  including  in  the  proposed 
pension  bill  to  be  presented  to  the  Legislature  a  provision  to  establish 
a  pension  system  for  the  employes  of  the  three  large  park  systems  in 
Chicago." 

The  secretary  of  the  South  Park  Commissioners  thereafter  ad- 
vised the  Illinois  Pension  Laws  Commission  "that  the  South  Park 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


185 


Commissioners  approve  of  this  matter  and  respectfully  request  that 
such  provision  be  included  in  the  general  pension  bill." 

In  view  of  the  definite  character  of  this  movement  on  the  part 
of  both  the  employing  authorities  and  the  employes  in  the  three  park 
systems  concerned,  the  Commission  recommends  that  one  of  the  funds 
to  be  included  in  the  proposed  system  of  pension  funds  under  the 
Standard  Plan  at  the  outset  be  a  fund  for  these  three  groups  of  park 
employes. 

In  the  case  of  such  present  employes  there  would  be  the  same 
accrued  liabilities  on  account  of  past  services  as  in  the  case  of  park 
policemen  and  others  having  pension  funds,  but  there  would  be  no 
present  pensioners  to  provide  for;  also  there  would  be  no  credits  for 
past  contributions. 

Counties  Have  Many  Employes 

Information  on  the  employes,  appointive  officials  and  elective  offi- 
cers of  the  counties  of  the  state  was  gathered  by  the  Commission,  in 
view  of  possible  developments  in  the  future. 

The  totals  of  the  resulting  figures  are  as  follows: 

TABLE   XI 
COUNTIES— EMPLOYES    AND    OFFICIALS 


EMPLOYES 

APPOINTIVE 
OFFICIALS 

ELECTIVE 
OFFICIALS 

Counties    Outside    of   Cook  .. 

942 

860 

1227 

3142 

145 

43 

Totals    

4084 

1005 

1270 

The  detailed  figures  on  all  of  the  counties  are  given  in  Table  XII 
below. 

At  present  no  county  as  such,  excepting  only  Cook  County,  of 
which  Chicago  is  the  county  seat,  has  a  pension  fund  for  any  county 
employes.  * 

Under  a  state  law  the  present  civil  service  employes  of  Cook 
County,  limited  chiefly  to  those  in  the  county  charitable  institutions 
and  allied  service,  have  a  pension  fund.  This  law  has  been  attacked 
in  the  courts,  but  in  its  present  form  has  withstood  the  attacks,  and 
recently  contributions  in  the  way  of  deductions  from  salaries  of  em- 
ployes have  been  made  under  it. 

If  the  pending  legislation  for  extending  civil  service  regulations 
to  cover  virtually  all  of  the  employes  of  Cook  County  is  enacted,  and 
thus  they  are  assured  permanency  of  tenure  the  Cook  County  pension 
fund  should  also  apply  to  them,  so  as  to  secure  their  retirement 


186 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


readily  when  they  become  inefficient  on  account  of  old  age.     The 

great  majority  of  these  are  in  clerical  service. 

Following  are  the  figures  on  employes  and  appointive  officials  of 

Cook  County: 

Under  Civil  Service 1248 

Not  Under  Civil  Service. .  ,  .2039 


Total    3287 

In  the  following  table  are  given  the  figures  in  all  the  counties  in 
the  State  exclusive  of  Cook  County : 

TABLE  XII 
COUNTY  OFFICERS  AND   EMPLOYES— COOK   COUNTY   EXCLUDED 


COUNTY 


ELECTIVE 
OFFICIALS 


APPOINTIVE 
OFFICIALS 


EMPLOYES 


Adams 10 

Alexander     12 

Bond    8 

Boone 9 

Brown 7 

Bureau    9 

Calhoun     12 

CarrolT    25 

Cass    12 

Champaign    9 

Christian 9 

Clark 9 

Clay   7 

Clinton    8 

Coles    8 

Crawford    10 

Cumberland    9 

De  Kalb 9 

Dewitt   9 

Douglas  9 

Dupage    9 

Edgar     10 

Edwards    12 

Effingham    8 

Fayette    9 

Ford 9 

Franklin    — 

Fulton    9 

Gallatin     9 

Greene     9 

Grundy    10 

Hamilton     9 

Hancock    9 

Hardin     10 

Henderson    8 

Henry    

Iroquois     

Jackson    ; 

Jasper    

Jefferson     9 

Jersey    

Joe  Daviess    

Johnson     8 

Kane    13 

Kankakee    9 

Kendall     9 

Knox    8 

LaSalle    16 

Lake     9 

Lawrence    17 

Lee     9 

Livingston    , 10 

Logan    8 


6 

3 
8 
4 
3 
1 
5 
8 
3 
4 
7 
2 
3 
7 
5 
2 
11 
11 
8 
8 
8 
11 
8 
7 
3 

4 
3 
6 
5 
2 
5 
4 
2 
8 
2 
4 
1 
7 
9 

10 
5 

12 
6 
9 
2 

18 
3 
3 
3 

12 
7 


7 

6 

10 

3 
12 

0 

4 

20 
21* 
19 

2 

4 

4 

6 

3 

0 

3 
10 

2 
13 


1 

4 

0 

10 

12 
3 
0 

10 

1 

10 

10 

12 

2 

2 

3 

2 

2 

40 

11 

0 

50 

4 

48 
7 

10 
15 
15 


ILLINOIS  PENSION  LAWS  COMMISSION.  1918-1919 


187 


TABLE  XII— CONTINUED 
COUNTY   OFFICERS   AND   EMPLOYES— COOK    COUNTY   EXCLUDED 


COUNTY 


ELECTIVE 
OFFICIALS 


APPOINTIVE 
OFFICIALS 


EMPLOYES 


McDonough    9 

McHenry     9 

McLean   10 

Macon    

Macoupin 

Madison     19 

Marion     9 

Marshall    9 

Mason    9 

Massac     S3 

Menard    10 

Mercer     

Monroe    12 

Montgomery   

Morgan    10 

Moultrie    9 

Ogle   6 

Peoria    61 

Perry   12 

Piatt     9 

Pike   9 

>pe IS 

tilaski    10 

Putnam    40 

Randolph     12 

Richland    10 

Rock  Island   12 

St.  Clair   13 

Saline 85 

Sangamon     15 

Schuyler    .....' 9 

Scott     12 

Shelby   9 

Stark    9 

Stephenson     7 

Tazewell    9 

Union     12 

Vermilion 14 

Wabash    12 

Warren    8 

Washington    9 

Wayne 9 

White     9 

Whiteside    8 

Will    14 

Williamson     9 

Winnebago    44 

Woodford    9 


Totals  for  counties,  exclusive  of  Cook  County 


1227 


6 

33 
10 
16 

1 

6 
1 
4 
14 
4 

10 
9 
4 
6 

48 

22 
8 

11 
4 
2 
4 
9 
5 

9 

105 
80 
5 
3 
2 
3 
1 
8 
7 
9 
9 
2 

6 
3 
3 

11 
3 

13 
6 


860 


8 

11 

9 

25 

30 
2 
2 
6 

1 

3 
1 

11 
9 
5 
1 

34 
2 
2 

20 
2 
5 
1 
4 

26 

71 

9 

10 

2 

1 

7 

9 
15 

27 

10 

1 

6 

8 

12 

38 

5 

27 
14 


942 


* — County  farm  excluded. 

16,129  Officials  and  Employes  in  Downstate  Cities  and  Villages  of 
Over  1000 

There  are  363  cities  and  villages  of  1,000  to  100,000  inhabitants, 
as  shown  in  the  Federal  census  of  1910 — the  cities  outside  of  Chicago 
—in  Illinois.  These  include  the  cities  of  5,000  and  over  listed  sep- 
arately in  Table  V  above.  The  Commission  made  diligent  effort 
through  questionnaires  to  get  complete  information  from  all  of  these 
363  cities  and  villages  on  their  officers,  officials  and  employes,  includ- 
ing volunteer  firemen.  Unfortunately,  as  shown  by  the  blanks  in 
the  table  below,  it  was  not  possible  to  get  complete  information.  Also 


188 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


the  dividing  line  between  employes  and  elective  officials  was  difficult 
to  trace.  Information  shows  that  these  363  cities  have  3,457  elective 
officials,  2,219  appointive  officials,  1,555  paid  firemen,  4,820  volunteer 
firemen,  1,515  policemen  and  2,563  other  employes.  This  makes  a 
total  of  16,129. 

These  are  divided  as  shown  below  in  Table  XIII : 

TABLE  XIII 

SUMMARY  OF  INFORMATION  ON  363  CITIES  AND  VILLAGES  OF  1,000  AND  OVER 
EXCLUSIVE   OF   CHICAGO 


">i 

11 

fc 

Q    W 

h 

to 

gs 

H    y 

a  « 

2s 

*s 

w 

8s 

is 

wo 

P 

£8 

£ 

3? 

£« 

u 

i 

PS! 

OS 

w 

72   Cities  of 

5000  and  over 

782 

866 

1059 

612 

1006 

2022 

291    Municipalities 
of  1000  to  5000                

2675 

1353 

496 

4208 

509 

541 

363  Municipalities 
of  1000  and  over 

3457 

2219 

1555 

4820 

1515 

2563 

The  detail  figures  are  as  shown  in  Table  XIV,  following: 

TABLE  XIV 

363  CITIES  AND  VILLAGES  OF  1000 -AND  OVER— EXCLUSIVE  OF  CHICAGO- 
POPULATION,  ELECTIVE  OFFICERS,  APPOINTIVE  OFFICIALS,  PAID  FIREMEN, 
VOLUNTEER  FIREMEN,  POLICEMEN  AND  OTHER  EMPLOYES. 


CITY  OR  VILLAGE 

POPULA- 
TION 

ELECTIVE 
OFFICERS 

APPOINTIVE 
OFFICIALS 

PAID 
FIREMEN 

VOLUNTEER 
FIREMEN 

POLICE- 
MEN 

OTHER 
EMPLOYES 

2464 

8 

3 

20 

1281 

H 

2 

o 

13 

1 

Aledo    .... 

2144 

11 

4 

19 

2 

2 

Altamont    ... 

1328 

6 

5 

16 

3 

Alton 

17528 

5 

17 

23 

18 

6 

1749 

14 

8 

o 

20 

2 

1 

Anna    .... 

2809 

12 

4 

o 

8 

1 

Arcola    

2100 

-    11 

7 

1 

1943 

8 

2 

o 

40 

1 

o 

Arthur    ...        .      ... 

1080 

7 

2 

22 

1 

Ashland   

1096 

10 

2 

6 

1 

1918 

10 

3 

12 

1 

1 

Astoria 

1357 

9 

3 

o 

12 

1 

2 

Athens    

1340 

9 

2 

o 

1 

o 

Atlanta     

1367 

10 

2 

1 

1814 

10 

1 

o 

16 

1 

o 

Augusta     .          .    . 

1146 

9 

9 

1 

Aurora   

29807 

21 

18 

31 

38 

250 

Averyville    

2668 

8 

6 

2 

0 

2 

Barrington  .            ... 

1444 

7 

5 

23 

2 

Barry    

1647 

10 

3 

o 

25 

1 

0 

Bartonville    

1536 

9 

3 

o 

25 

1 

0 

Batavia 

4436 

13 

6 

1 

10 

1 

14 

Beardstovrn   

6107 

15 

18 

1 

10 

5 

Belleville     

21122 

6 

10 

17 

16 

25 

Belvidere 

7253 

13 

19 

8 

6 

Bement    

1530 

8 

4 

1 

Benld    

1912 

10 

2 

9 

15 

2 

9 

Benton   .... 

2675 

5 

3 

o 

o 

2 

1 

ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


189 


TABLE  XIV— CONTINUED 

363  CITIES  AND  VILLAGES  OF  1000  AND  OVER— EXCLUSIVE  OF  CHICAGO- 
POPULATION,  ELECTIVE  OFFICERS,  APPOINTIVE  OFFICIALS,  PAID  FIREMEN, 
VOLUNTEER  FIREMEN,  POLICEMEN  AND  OTHER  EMPLOYES. 


CITY  OR   VILLAGE 

,  £ 

0  o 

CTIVE 
FICERS 

OINTIVE 
FICIALS 

0 

REMEN 

UNTEER 
KEMEN 

u 

S  * 

[ER 
tPLOYES 

fil 

3° 

<° 

^ 

£& 

•1   W 

&* 

6W 

Berwyn 

5841 

15 

6 

4 

16 

5 

15 

Bloomington    .  . 

25768 

8 

19 

30 

28 

48 

Blue    Island    .  .    . 

8043 

15 

4 

5 

40 

10 

15 

Bradley 

1942 

8 

4 

o 

12 

2 

2 

1958 

10 

5 

10 

2 

Breese 

2128 

10 

7 

o 

24 

1 

3 

Bridgeport 

2703 

17 

6 

6 

2 

Brookfield    

2186 

8 

2 

o 

20 

1 

1569 

8 

9 

10 

3 

Brookport    

1443 

10 

1 

1 

3 

1 

1 

Bunker   Hill 

1046 

9 

5 

o 

2 

Bushnell 

2619 

10 

4 

15 

2 

Cairo     

14548 

9 

8 

21 

20 

26 

Cambridge     

1272 

7 

3 

30 

1 

Camp    Point    

1148 

18 

3 

o 

26 

o 

10453 

5 

18 

7 

3 

4 

Carbondale 

5411 

6 

3 

5 

2 

2 

Cardiff 

1031 

7 

2 

o 

o 

1 

o 

Carlinville 

3616 

16 

8 

12 

3 

1 

Carlyle    

1982 

11 

3 

20 

2 

4 

Carmi     

2833 

14 

7 

30 

2 

7 

1128 

8 

1 

16 

1 

Carrier   Mills 

1558 

9 

5 

o 

1 

Carrollton      

2323 

10 

5 

12 

2 

2 

Carterville     

2971 

11 

8 

10 

10 

1 

3 

Carthage    

2373 

10 

5 

30 

2 

2157 

11 

8 

o 

25 

2 

5 

Central    City     

1179 

8 

5 

o 

o 

1 

o 

Centra!  ia 

9680 

5 

8 

1 

5 

g 

12 

Champaign 

12421 

5 

g 

9 

o 

10 

14 

Charleston     

5884 

17 

10 

2 

10 

4 

10 

1112 

8 

3 

15 

2 

Ckenoa     • 

1314 

5 

5 

6 

1 

1 

1048 

8 

3 

20 

1 

2 

Chester 

2747 

11 

g 

22 

Chicago    Heights 

14524 

19 

12 

19 

21 

Chillicothe     

1851 

10 

4 

g 

2 

2 

Chrisman     

1193 

5 

3 

12 

o 

1 

o 

1825 

10 

3 

1 

1 

1 

Cicero     

14557 

9 

3 

56 

o 

50 

130 

Clinton 

5165 

5 

7 

3 

20 

2 

10 

Coal   City    

2667 

5 

2 

22 

2 

2 

Colchester    

1445 

12 

11 

g 

o 

1 

o 

Collinsville    

7478 

14 

7 

2 

16 

7 

15 

2076 

g 

4 

100 

Crete     

1005 

8 

4 

o 

22 

1 

o 

Crystal    Lake 

1242 

\   10 

g 

12 

Cuba     

2019 

9 

4 

o 

15 

1 

2 

Dallas   City    

1288 

6 

5 

1 

30 

1 

Danville     

27871 

18 

14 

31 

22 

Decatur    

31140 

5 

22 

39 

32 

30 

DeKalb     .    . 

8102 

15 

3 

7 

e 

1  fl 

Delavan    

1175 

1  1 

g 

25 

2 

Depue  

1339 

9 

8 

1 

20 

3 

Desplaines   

2348 

8 

3 

o 

6 

1 

2 

Divernon   

1519 

1 

15 

I 

11 

Dixon     

7216 

5 

2 

5 

Dolton    

1869 

9 

3 

26 

Dorrisville     

1184 

10 

3 

o 

o 

Downers    Grove     

2601 

5 

7 

2 

15 

2 

10 

Duquoin     

5454 

15 

19 

o 

3 

o 

Dwight    

2156 

9 

2 

1C 

Earlville     

1059 

5 

5 

o 

20 

1 

East   Dubuque    

1253 

9 

2 

30 

3 

1 

East    Dundee    

1405 

8 

5 

15 

2 

East  Moline     ... 

2665 

13 

13 

3 

East  Peoria  

1493 

5 

10 

15 

4 

190 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


TABLE  XIV— CONTINUED 

363  CITIES  AND  VILLAGES  OF  1000  AND  OVER— EXCLUSIVE  OF  CHICAGO- 
POPULATION,  ELECTIVE  OFFICERS,  APPOINTIVE  OFFICIALS,  PAID  FIREMEN, 
VOLUNTEER  FIREMEN,  POLICEMEN  AND  OTHER  EMPLOYES. 


CITY  OR  VILLAGE 

POPULA- 
TION 

ELECTIVE 
OFFICERS 

APPOINTIVE 
OFFICIALS 

PAID 
FIREMEN 

VOLUNTEER 
FIREMEN 

POLICE- 
MEN 

OTHER 
EMPLOYES 

East  St.  Louis  

58547 

20 

82 

85 

5014 

12 

1 

2 

40 

5 

20 

3898 

6 

8 

1 

32 

3 

1 

El  Paso 

1470 

12 

16 

14 

1 

6 

Eldorado  

3366 

5 

3 

10 

o 

3 

1 

Elgin  

25976 

6 

22 

27 

0 

21 

63 

2360 

12 

10 

14 

2 

4 

1390 

10 

1 

27 

1 

Equality  

1180 

g 

2 

1 

Eureka  

1525 

10 

4 

o 

15 

1 

0 

24978 

18 

7 

30 

32 

200 

2505 

10 

4 

14 

1 

2 

Fairfield  

2479 

H 

14 

12 

2 

1603 

g 

3 

3 

2 

2421 

10 

4 

1 

20 

2 

2 

Flora  

2704 

5 

4 

g 

1 

Forest  Park  

6594 

5 

11 

2 

7 

14 

15 

Freeburg  

1397 

Q 

2 

o 

170 

1 

4 

17567 

15 

12 

21 

2 

13 

3 

Fulton 

2174 

10 

5 

2 

30 

2 

Galena  

4835 

12 

30 

125 

4 

22089 

19 

15 

15 

13 

84 

Galva 

2498 

11 

14 

38 

2 

6 

3199 

10 

H 

o 

27 

2 

2 

Geneva  

2451 

10 

5 

10 

2 

7 

1257 

10 

3 

1 

16 

2 

0 

2307 

10 

4 

0 

0 

1 

0 

Gibson  City   .    .  .     .... 

2086 

9 

4 

H 

1 

Gillespie  

2241 

13 

3 

13 

3 

Gilman  

1305 

10 

4 

9 

Girard 

1891 

10 

3 

9 

o 

1 

1220 

9 

5 

o 

25 

1 

2 

Glen  Ellyn  

1763 

9 

10 

o 

20 

1 

0 

1899 

3 

15 

3 

9 

1088 

8 

3 

o 

o 

0 

Grafton  

1116 

10 

1 

o 

o 

1 

0 

Granite  City  

9903 

16 

8 

6 

10 

12 

Granville 

1391 

9 

4 

17 

1 

1940 

10 

4 

15 

o 

1 

1161 

9 

1 

o 

24 

1 

0 

1224 

9 

3 

12 

1 

3178 

8 

6 

1 

1 

. 

1262 

9 

1 

o 

8 

1 

2 

1008 

9 

1 

Hamilton  

1627 

5 

7 

1 

12 

1 

5309 

5 

3 

o 

10 

3 

2 

Harvard   

3008 

11 

6 

1 

16 

2 

7227 

5 

13 

4 

21 

4 

3 

3525 

10 

7 

2 

8 

3 

3 

1687 

10 

7 

1 

40 

1 

0 

6861 

15 

12 

2 

8 

5 

Highland  

2675 

11 

6 

1 

23 

3 

12 

Highland  Park  . 

4209 

5 

7 

2 

9 

5 

8 

Highwood  

1219 

10 

1 

0 

15 

1 

1 

3424 

6 

5 

24 

2 

Hinsdale  

2451 

9 

11 

1 

20 

3 

18 

1086 

9 

1 

0 

1 

0 

0 

4698 

13 

10 

20 

2 

15326 

5 

9 

11 

10 

28 

4113 

5 

4 

o 

10 

2 

7 

Johnston  City  .  .      

3248 

12 

5 

o 

10 

3 

Joliet  

34670 

5 

19 

27 

26 

140 

1169 

9 

2 

o 

o 

1 

0 

Kankakee    ,    .      .  •  *  .  . 

13986 

19 

10 

12 

13 

20 

1515 

10 

2 

9 

0 

0 

9307 

5 

10 

6 

10 

5 

40 

1818 

11 

8 

2 

2 

ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


191 


TABLE  XIV— CONTINUED 

363  CITIES  AND  VILLAGES  OF  1000  AND  OVER— EXCLUSIVE  OF  CHICAGO- 
POPULATION,  ELECTIVE  OFFICERS,  APPOINTIVE  OFFICIALS,  PAID  FIREMEN, 
VOLUNTEER  FIREMEN,  POLICEMEN  AND  OTHER  EMPLOYES. 


CITY  OR  VILLAGE 

POPULA- 
TION 

ELECTIVE 
OFFICERS 

APPOINTIVE 
OFFICIALS 

PAID 
FIREMEN 

VOLUNTEER 
FIREMEN 

POLICE- 
MEN 

OTHER 
EMPLOYES 

5282 

8 

9 

0 

12 

3 

4 

La  Grange   Park    

1131 

8 

2 

0 

8 

1 

La  Harpe       .  .        . 

1349 

8 

3 

o 

15 

1 

0 

LaSalle    

11537 

18 

25 

25 

16 

10 

25 

1495 

10 

5 

7 

o 

2 

0 

Ladd     .  . 

1910 

8 

5 

21 

1 

1 

Lake   Forest 

3349 

10 

4 

10 

5 

10 

Lanark    

1175 

9 

4 

1 

2 

Lansing     

1060 

9 

2 

1 

3235 

12 

3 

0 

8 

2 

2 

1907 

4 

3 

25 

1 

2 

2284 

8 

3 

44 

2 

2 

Lena     . 

1168 

9 

9 

o 

10 

1 

Leroy   

1702 

11 

4 

1 

2 

o 

Lewistown     ... 

2312 

11 

4 

1 

10 

2 

1 

Lexington    

1318 

10 

4 

o 

1 

1 

0 

1724 

8 

2 

2 

12 

1 

Lincoln     .  . 

10892 

5 

2 

5 

6 

14 

Litchneld     .  .  . 

5971 

16 

5 

2 

75 

2 

Livingston       .... 

1092 

8 

3 

2 

23 

2 

1 

Lockport    .  . 

2555 

10 

4 

o 

24 

3 

1011 

8 

4 

o 

10 

1 

3 

1483 

8 

2 

o 

20 

2 

4 

McHenry     .  . 

1031 

8 

3 

2 

McLeansboro    ...        

1796 

11 

2 

1 

22 

1 

4 

5774 

29 

20 

8 

6 

3 

5046 

9 

g 

1 

12 

8 

3 

1229 

9 

5 

o 

5 

1 

o 

1936 

10 

5 

1 

12 

1 

1  • 

7093 

7 

14 

2 

7 

3 

Marissa    ... 

2004 

9 

2 

o 

10 

1 

o 

Mark     

1025 

8 

2 

18 

o 

o 

o 

1160 

10 

4 

o 

13 

1 

1 

Marseilles    

3291 

4 

8 

2 

12 

2 

Marshall     

2569 

9 

3 

2 

5 

Martinsville 

1500 

10 

4 

o 

o 

Mascoutah   

2081 

10 

4 

50 

1 

Mason    City    

1842 

10 

4 

o 

15 

2 

o 

11456 

18 

7 

8 

8 

8 

8033 

8 

10 

7 

o 

3 

9 

Melrose  Park 

4806 

14 

4 

1 

20 

4 

Mendota  .  . 

3806 

12 

g 

1 

25 

c 

Metropolis     ...    . 

4655 

13 

4 

12 

2 

9 

Milford    

1316 

8 

g 

o 

0 

1 

o 

Millstadt        

1140 

8 

3 

o 

32 

1 

2 

Minonk    

2070 

10 

3 

1 

16 

1 

Moline      

24199 

>       8 

12 

15 

21 

52 

2201 

10 

3 

10 

1 

1 

9128 

24 

18 

4 

80 

7 

Monticello                        .    .  . 

1981 

10 

5 

13 

13 

1 

Morris    

4563 

14 

5 

25 

3 

Morrison    

2410 

10 

12 

18 

22 

2 

5 

1126 

8 

3 

1 

1004 

8 

1 

20 

2 

Mound   City    ... 

2837 

8 

2 

20 

2 

Mounds    

1686 

9 

5 

o 

o 

2 

Mount  Carmel    

6934 

6 

7 

1 

5 

2 

1 

1759 

10 

15 

1 

1 

7 

Mount  Morris       . 

1132 

8 

2 

1 

Mount   Olive    

3501 

12 

4 

o 

55 

3 

7 

Mount  Pulaski   

1511 

11 

6 

27 

2 

1986 

10 

4 

25 

1 

1 

Mount  Vernon 

8007 

15 

17 

5 

4 

1  •y 

Moweaqua     .... 

1513 

7 

6 

o 

25 

1 

Murphysboro     .  .    .      

7485 

5 

15 

3 

f. 

Naperville    

3449 

5 

8 

25 

2 

10 

Nashville     

2135 

10 

3 

15 

2 

i 

192 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


TABLE  XIV— CONTINUED 

363  CITIES  AND  VILLAGES  OF  1000  AND  OVER— EXCLUSIVE  OF  CHICAGO- 
POPULATION,  ELECTIVE  OFFICERS,  APPOINTIVE  OFFICIALS,  PAID  FIREMEN, 
VOLUNTEER  FIREMEN,  POLICEMEN  AND  OTHER  EMPLOYES. 


CITY   OR   VILLAGE 

POPULA- 
TION 

ELECTIVE 
OFFICERS 

APPOINTIVE 
OFFICIALS 

PAID 
FIREMEN 

VOLUNTEER 
FIREMEN 

POLICE- 
MEN 

OTHER 
EMPLOYES 

Nauvoo     

1020 
1074 
1131 
1372 
1264 
2108 
1872 
4024 
1055 
3306 
19444 
1159 
1482 
1035 
1400 
2018 
3194 
5011 
1273 
2180 
9535 
1144 
1399 
6055 
7664 
2009 
1399 
2912 
1022 
9897 
66950 
1207 
1033 
7984 
2587 
2722 
2095 
1019 
1627 
1828 
6090 
4131 
1083 
36587 
1384 
1240 
1054 
2456 
1702 
1911 
1311 
3863 
2732 
2657 
24335 
1101 
45401 
2171 
1422 
2422 
1065 
4046 
1227 
1391 
2669 
1563 
2557 

9 
8 
8 
8 
10 
6 
4 
8 
8 
4 
8 
8 
6 
9 
9 
9 
12 
5 
13 
5 
5 
8 
8 
17 
5 
10 
10 
12 
10 
5 
5 
8 
10 
14 
11 
5 
11 
8 
8 
11 
14 
6 
9 
19 
8 
10 
8 
15 
9 
7 
8 
12 
5 
5 
5 
8 
5 
9 
9 
10 
9 
11 
8 
8 
5 
7 
11 

5 
2 
1 
4 
17 
5 
5 
10 
1 
8 
7 
4 
2 
2 
3 
5 
10 
11 
8 
5 
21 
2 
2 
6 
3 
13 
2 
20 
3 
23 
47 
5 

4 
6 
6 
3 
3 
3 
9 
7 
7 
3 
13 
6 
4 
2 
12 
5 
2 
g 

3 

5 
6 
20 
2 
20 
3 
3 
4 
4 
7 

3 
6 

1 
3 

o 

0 

o 

0 
3 
1 

O 

24 
0 
0 

0 

o 

10 

5 
18 
0 

5 

10 
0 
4 
85 
0 
1 
12    • 
7 
10 

1 

1 
11 

1 

50 
12 
0 

0 
15 
0 

1 

1 

27 

67 
0 

2 
0 

20 

70 
32 

8 
14 
12 

~6 
0 

25 
12 
3 

"7 

20 
0 
0 
10 
10 
20 
15 
10 

5 
70 
10 

12 

30 

20 
8 

31 
15 

0 
65 

12 

18 
10 
13 
16 

15 
10 
12 
25 
4 
18 
20 
47 

1 
2 
1 
1 
2 
1 
3 
3 
1 
3 
25 
2 
1 
1 
1 
2 
4 
2 
2 
2 
9 
2 
1 
2 
4 
2 
1 
2 
2 
7 
85 
1 

7 
2 
1 
2 
1 
1 
2 
3 
3 
1 
39 
1 
1 

4 
3 
1 
1 
3 
3 
2 
18 
3 
45 
2 
1 
1 
1 
2 

1 
1 
1 

2 

0 

3 

2 

3 
0 
8 

3 

1 

2 
7 

0 
3 

0 
0 
6 
90 

6 

3 
3 
16 

40 
5 
3 

5 

0 

1 

16 

60 
2 
118 
2 
1 
0 

12 
0 

3 

Nioga    

New  Athens   

New    Baden 

Newman    ....          .... 

Newton    

Normal     .  .          .            .  . 

Norris    City 

North  Chicago      

Oak   Park 

Oakland 

Oblong 

Odell     

Odin 

O'Fallon 

Oglesby          

Olney     

Oregon     . 

Ottawa     

Palatine    

Palestine    

Pana 

Paris     

Park    Ridge    

Paxton    .  . 

Pecatonica 

Pekin    

Peoria 

Peotone    ...                      . 

Percy     .        .  .          .... 

Peru    

Pittsfield     

Plainfield     

Piano    

Polo             .  - 

Pontiac     

Redbud                 ....              

Rochelle  

Rock    Falls 

Rock   Island                

Rockdale      

Rockford 

St    Anne              

St    Charles 

St    Elmo                         .              

St      Francisville          

Salem 

ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


193 


TABLE  XIV— CONTINUED 

363  CITIES  AND  VILLAGES  OF  1000  AND  OVER— EXCLUSIVE  OF  CHICAGO- 
POPULATION,  ELECTIVE  OFFICERS,  APPOINTIVE  OFFICIALS,  PAID  FIREMEN, 
VOLUNTEER  FIREMEN,  POLICEMEN  AND  OTHER  EMPLOYES. 


CITY   OR   VILLAGE 

i2 

£  o 

:CTIVE 

DICERS 

•OINTIVE 
-FICIALS 

M 
• 

nS 

.UNTEER 
REMEN 

A 

2* 

IER 
dPLOYES 

&* 

d° 

.0 

^ 

|fi 

£* 

»» 

3691 

12 

5 

2 

8 

5 

6 

1370 

8 

4 

15 

1 

0 

Sesser                       .            •  • 

1292 

9 

5 

o 

0 

2 

Shawneetown    

1863 

9 

1 

0 

0 

1 



Sheffield 

1009 

g 

4 

o 

20 

2 

Shelbyville 

3590 

13     • 

4 

o 

15 

3 

11 

Sheldon     . 

1143 

8 

2 

18 

1 

Silvis    

1163 

9 

4 

17 

1 

_ 

Sorento       

1018 

8 

7 

0 

6 

1 

0 

South  Holland   

1065 

8 

2 

14 

6 

2403 

8 

2 

1 

15 

1 

Sparta    .            ... 

3081 

11 

2 

o 

15 

0 

2 

Spring  Valley            

7035 

5 

13 

1 

15 

3 

0 

Springfield     

51678 

5 

36 

77 

49 

218 

5048 

13 

5 

0 

0 

4 

9 

Steger 

2161 

8 

2 

2 

38 

2 

2 

Sterling 

7467 

5 

15 

5 

10 

5 

25 

Stockton     

1096 

8 

3 

20 

Stonington     

1118 

7 

3 

2 

o 

1 

2 

Streator     

14253 

18 

4 

10 

o 

14 

2621 

11 

3 

1 

1 

3 

1413 

9 

2 

o 

15 

2 

3926 

12 

5 

1 

39 

2 

4 

Taylorville     

5446 

12 

26 

2 

6 

3 

Thayer   

1012 

9 

0 

o 

1 

0 

1030 

8 

2 

0 

32 

4 

0 

Toluca 

2407 

10 

6 

6 

6 

3 

4 

1208 

9 

15 

o 

25 

1 

Tower  Hill      

1040 

9 

3 

o 

o 

1 

o 

Trenton    

1694 

9 

1 

o 

30 

1 

4 

1447 

10 

2 

o 

30 

1 

2453 

10 

4 

0 

16 

2 

3 

Urbana 

8245 

IS 

7 

5 

0 

4 

Vandalia    

2974 

11 

o 

o 

12 

1 

3 

Venice      

3718 

8 

o 

35 

9 

3 

1118 

8 

4 

1 

1124 

7 

1 

o 

o 

o 

Q 

1828 

10 

2 

Virden    

4000 

13 

4 

•   0 

8 

3 

5 

Virginia     

1501 

10 

5 

12 

o 

1 

o 

Warren    

1331 

8 

5 

30 

1 

3 

2254 

10 

4 

75 

1 

12 

1530 

10 

7 

o 

16 

2 

\Vaterloo 

2091 

11 

7 

30 

2 

Watseka     

2476 

9 

5 

1 

\Vaukegan     

16069 

5 

4 

13 

3 

12 

50 

1538 

12 

12 

50 

2 

1442     > 

12 

4 

15 

2 

West  Chicago  

2378 

11 

4 

o 

24 

3 

5 

West    Dundee    

1380 

7 

7 

o 

16 

2 

1 

West    Frankfort    

2111 

13 

9 

4 

4 

o 

4948 

13 

g 

3 

g 

Westville 

2607 

8 

4 

o 

9 

7 

2 

Wethersfield    . 

1593 

9 

2 

o 

20 

1 

o 

Wheaton    

3423 

5 

8 

o 

28 

1 

3 

Whitehall     

2854 

11 

9 

3 

12 

2 

Willisville 

1082 

8 

3 

1 

Wilmette 

4943 

12 

8 

2 

15 

5 

10 

Wilmington     
Winchester    

1450 
1639 

11 
10 

3 
3 

17 

o 

0 

24 

2 
'2 

0 
3 

Winnetka 

3168 

18 

5 

o 

15 

10 

•tf. 

Witt 

2170 

9 

2 

8 

3 

Woodstock     . 

4331 

11 

1 

o 

30 

3 

14 

Worden    

1082 

8 

2 

o 

18 

1 

Wyoming     

1506 

10 

3 

20 

1 

Zion    City          .      ... 

4789 

11 

8 

12 

10 

2 

Totals     

3457 

2219 

1555 

4820 

1515 

2563 

ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


195 


CHAPTER  IX 


STATISTICS  ON  AGES,  YEARS  OF  SERVICE  AND 
SALARIES  RELATING  TO  POLICEMEN  AND 
FIREMEN  IN  CITIES  OF  MORE  THAN 
5,000  AND  LESS  THAN  100,000  IN- 
HABITANTS, AND  TO  STATE 
INSTITUTIONAL 
TEACHERS 


Supplementary  to  the  Statistical  Chapter  of  the 
Report  of  the  Commission  of  1916 


The  Tables  of  this  chapter  are  taken  from  those  used  by  the 
Actuary  in  computing  the  cost  of  supplementary  annuities  for  present 
employes  and  are  supplementary  to  the  tables  furnished  in  the  Report 
of  the  Pension  Commission  of  1916.  The  data  was  derived  from  in- 
formation sheets  filled  out  by  the  employes  concerned  under  the  super- 
vision of  their  Heads  of  Departments. 

TABLE  I 

(Policemen    in    Cities    Outside    of    Chicago) 

SHOWING  THE  NUMBER  OF  POLICEMEN  IN  SERVICE  JULY  1,  1918,  IN  THE 
CITIES  LISTED  IN  TABLE,  CLASSIFIED  IN  GROUPS  ACCORDING  TO  AGE  AND 
YEARS  OF  SERVICE  AS  OF  JULY  1,  1918.  DATA  IN  SEVEN  CITIES  MISSING. 


Y 

EARS  < 

DF  SEF 

.VICE 

AGES 
INCLU- 
SIVE 

i» 

u 

*§rf 

*$$ 

I 

*i?i 

s3<! 

ro  Is)  y 

1 

TOTALS 

i^ 

&•" 

o><£ 

i-i 

%** 

8*" 

8s"" 

£** 

5^ 

22-24 

8 

! 

g 

25-29 

49 

4 

53 

30-34 

74 

31 

3 

108 

35-39 

72 

34 

22 

2 

130 

40-44 

65 

38 

26 

7 

2 

138 

45-49 

52 

38 

31 

15 

3 

139 

50-54 

29 

24 

24 

14 

12 

4 

2 

109 

55-59 

20 

25 

20 

14 

5 

7 

2 

93 

60-64 

6 

8 

10 

3 

3 

7 

1 

2 

1 

41 

65-69 

4 

6 

1 

5 

2 

4 

2 

24 

70-74 

1 

1 

2 

1 

5 

75-78 

1 

1 

2 

TOTALS.  .. 

380 

208 

139 

60 

30 

22 

7 

3 

1 

850 

196 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


TABLE  II 

(Policemen  in  Cities  Outside  of  Chicago) 

SHOWING  BY  CITIES  THE  NUMBER  OF  POLICEMEN  IN  SERVICE  JULY  1, 
1918,  AND  THE  AGGREGATE  AND  AVERAGE  SALARIES  OF  SUCH  POLICEMEN. 
DATA  ON  SEVEN  CITIES  MISSING.  STATISTICS  FURNISHED  BY  THE  POLICE 
DEPARTMENT  OF  THE  CITIES  LISTED. 


NAME  OF  CITY 

NUMBER  OF 
POLICEMEN 

AGGREGATE 

OF 

SALARIES 

AVERAGE 
SALARY 

Alton 

12 

$13  458 

$1  121 

Aurora  ....          .  . 

32 

36  640 

1  145 

Beardstown    

4 

4  140 

1  035 

Belleville     

16 

17,400 

1  087 

4 

4  320 

1  080 

Bloomington                      . 

28 

30  480 

1  088 

Blue    Island    

9 

9  540 

1,060 

Cairo      

16 

16,740 

1,046 

4 

4  440 

1  110 

Centralia     ... 

6 

6,300 

1,050 

Champaign      

7 

8,440 

1,205 

4 

3  840 

960 

21 

27  420 

1,305 

Cicero        

47 

58,832 

1,251 

Clinton    

2 

1,700 

850 

7 

7  680 

1  097 

Danville 

13 

15  930 

1,225 

Decatur     

30 

35,480 

1,182 

DeKalb    

4 

4,260 

1,065 

9 

8  790 

977 

4 

4,680 

1,170 

East  St.   Louis    

62 

76,696 

1,237 

4 

4,200 

1,050 

20 

21,390 

1,069 

30 

35,700 

1,190 

Forest  Park     

6 

7,620 

1,270 

13 

14,220 

1,094 

9 

8,784 

976 

13 

15,600 

1,200 

Harvey    

5 

5,640 

1,128 

5 

6,276 

1,255 

Joliet          .                               ... 

31 

34,689 

1,119 

11 

12,160 

1,105 

5 

5,400 

1,080 

La  Salle 

9 

11,691 

1,299 

6 

5,940 

990 

10 

12,000 

1,200 

2 

2,600 

1,300 

6 

5,160 

860 

4 

4,720 

1,180 

24 

25,506 

1,062 

1 

960 

960 

Mt    Carmel  

2 

1,680 

840 

2 

1,440 

720 

6 

6,240 

1,040 

Oak  Park   

24 

30,920 

1,288 

Olney     

2 

1,380 

690 

7 

6,960 

994 

2 

1,980 

990 

4 

4,200 

1,050 

Peoria                •  

77 

84,800 

1,101 

7 

8,448 

1,207 

3 

2,680 

894 

32 

32,820 

1,025 

35 

42,620 

1,217 

11 

12,800 

1,164 

40 

50,360 

1,259 

1 

1,080 

1,080 

14 

16,151 

1,153 

6 

5,500 

917 

3 

3,240 

1,080 

5 

4,260 

852 

Waukegan   

12 

14,340 

1,195 

Totals    

850 

$971,361 

ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


197 


TABLE  III 

(Firemen  in  Cities  Outside  of  Chicago) 

SHOWING  THE  NUMBER  OF  FIREMEN  IN  SERVICE  JULY  1,  1918,  IN  THE 
CITIES  LISTED  IN  TABLE  IV,  CLASSIFIED  IN  GROUPS  ACCORDING  TO  AGE 
AND  YEARS  OF  SERVICE  AS  OF  JULY  1,  1918. 


AGES 
INCLU- 
SIVE 

YEARS  OF  SERVICE 

c/> 

N 

JJM.5 

id 
<*$& 

ir> 

*Sd' 

±£* 

ojd 
Sir* 

s3| 

&"* 

OT   . 

$Sg 

lA>H|-l 
01 

c/> 

*3g 

<=>>£ 
ro 

?]N 

«0?*l-l 
CO 

pi 

• 

3 

$* 

TOTALS 

18-19 

20-24 
25-29 
30-34 
35-39 
40-44 
45-49 
50-54 
55-59 
60-64 
65-68 

Totals.. 

3 
40 
70 
67 
56 
39 
23 
11 
1 

42 
96 
150 
160 
146 
113 
76 
54 
21 
12 

2 
25 
64 
55 
41 
27 
9 
8 
1 

.* 

18 
38 
43 
25 
15 
5 
2 
1 

i 
11 

17 
15 
13 
10 
3 
2 

5 
17 
13 
11 
1 
2 

6 
10 
9 
2 

4 
7 
5 
4 

1 

3 
5 
2 

2 

i 

! 

310 

232 

148 

72 

49 

28 

20 

11 

2 

i 

873 

TABLE  IV 

(Firemen  in  Cities  Outside  of  Chicago) 

SHOWING  BY  CITIES  THE  NUMBER  OF  FIREMEN  IN  SERVICE  JULY  1,  1918, 
AND  THE  AGGREGATE  AND  AVERAGE  SALARIES  OF  SUCH  FIREMEN.  STA- 
TISTICS FURNISHED  BY  THE  FIRE  DEPARTMENT  OF  THE  CITIES  LISTED. 


NAME  OF  CITY 

NUMBER  OF 
FIREMEN 

AGGREGATE 

OF 

SALARIES 

AVERAGE 
SALARY 

Alton   .          

16 

$18  197 

$1  137 

Aurora           .... 

28 

32  330 

1  155 

Beardstown    

1 

1  080 

1  080 

Belleville    

18 

19  560 

1  087 

g 

8  880 

1  110 

Berwyn    . 

4 

4  380 

1  095 

Bloomington 

31 

34  500 

1  113 

Blue    Island    

4 

4  200 

1,050 

7 

7  680 

1  097 

Cairo     

16 

15,060 

941 

Centralia 

1 

960 

960 

Champaign    .  . 

9 

10  400 

1  156 

Charleston          .            ... 

2 

2  000 

1  000 

Chicago  Heights      

19 

23  520 

1  238 

3 

2,580 

860 

Collinsville 

2 

2  160 

1  080 

Danville 

33 

40  470 

1  226 

Decatur   

40 

46  350 

1,159 

DeKalb     

7 

7,360 

1,051 

5 

4,686 

937 

80 

99  200 

1  240 

Edwardsville    . 

2 

1,920 

960 

Elgin    

27 

33  130 

1  227 

Evanston     

39. 

48  004 

1,231 

Forest  Park 

1 

600 

600 

18 

19  657 

1  092 

Galesburg    . 

16 

18  366 

1  148 

Granite    City    

6 

7  320 

1  220 

Harvey    

4 

4,740 

1,185 

1 

1  200 

1  200 

Jacksonville 

4 

4  520 

1  130 

Joliet                ... 

36 

40,810 

1  134 

Kankakee    

12 

13,380 

1,115 

5 

6  600 

1  100 

5 

4  980 

996 

Litchfield 

2 

1,800 

900 

198 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


TABLE  IV— CONTINUED 
(Firemen  in  Cities  Outside  of  Chicago) 

SHOWING  BY  CITIES  THE  NUMBER  OF  FIREMEN  IN  SERVICE  JULY  1,  1918, 
AND  THE  AGGREGATE  AND  AVERAGE  SALARIES  OF  SUCH  FIREMEN.  STA- 
TISTICS FURNISHED  BY  THE  FIRE  DEPARTMENT  OF  THE  CITIES  LISTED. 


NAME  OF  CITY 

NUMBER  OF 
FIREMEN 

AGGREGATE 

OF 

SALARIES 

AVERAGE 
SALARY 

2 

1  792 

896 

7 

6  460 

923 

Maywood          .  . 

1  200 

1  200 

Moline     . 

9 

9  350 

1  039 

Monmouth    

4 

4  145 

1  036 

Mount  Vernon  

1 

600 

600 

Mt     Carmel 

o 

Murphysboro            

3 

3  060 

1  020 

Marion    

2 

2  220 

1  110 

Oak  Park 

17 

23  190 

1  364 

Ottawa 

5 

5  040 

1  008 

Paris    .  .  . 

5 

4  260 

852 

Pekin  

5 

6  240 

1  248 

Peru 

2 

3  320 

1  660 

Pontiac    .  .        .              .  . 

1 

1  140 

1  140 

71 

79  797 

1,124 

Quincy    

43 

47,799 

1,112 

Rockford           . 

59 

72  760 

1  233 

Rock    Island          .  .    .      .  . 

24 

27  405 

1  142 

Springfield    

65 

80,000 

1,231 

Sterling  

4 

3,860 

965 

Streator     .  .        ....          .  . 

10 

11  659 

1  166 

Taylorville      ....                  ... 

2 

2  220 

1,110 

Urbana    

6 

5  400 

900 

12 

12  780 

1  065 

Totals    . 

873 

1,008,277 

TABLE  V 

(State   Institutional    Teachers) 

SHOWING  THE  NUMBER  OF  TEACHERS  IN  SERVICE  JULY  1,  1918,  IN  THE 
STATE  INSTITUTIONS  LISTED  IN  TABLE  VI,  CLASSIFIED  ACCORDING  TO  AGE 
AND  YEARS  OF  SERVICE  AS  OF  JULY  1,  1918. 


AGES 
INCLU- 
SIVE 

YEARS  OF  SERVICE 

It 

*•>£ 

0 

si 
&* 

,!g 

±>Z 

s5g 

£  >5 

*\t 

O-^M 
CM 

Sj 

o\  <  C 

^£* 

LO^I-l 
(N 

ill 

O\  <   C 

SSS 

fO 

$ 

oX~ 

u»£ 
•* 

m 
9 
< 
w 
~>> 
in 

TOTALS 

20-24 
25-29 
30-34 
35-39 
40-44 
45-49 
50-54 
55-59 
60-64 
65-69 
70-74 

Totals 

11 
31 
10 
5 
2 
3 

1 

22 
24 
9 
1 
1 

12 
55 
45 
46 
47 
55 
35 
20 
13 
6 
2 

2 
11 
24 
9 

4 

1 

7 
18 
17 

4 
2 

1 

1 

17 
15 
10 
6 
1 

13 
12 
4 
2 

2 
8 
4 
2 

*   2 

1 

1 
5 
1 
1 

2 
2 

1 

"2 

.... 

63 

58 

51 

49 

50 

31 

18 

8 

5  i 

2 

1 

336 

ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


199 


TABLE  VI 

(State    Institutional   Teachers) 

SHOWING  BY  CITIES  THE  NUMBER  OF  TEACHERS  IN  SERVICE  JULY  1,  1918, 
AND  THE  AGGREGATE  AND  AVERAGE  SALARIES  OF  SUCH  INSTITUTIONAL 
TEACHERS. 


NAME  OF  INSTITUTION 

NUMBER 

OF 

TEACHERS 

AGGREGATE 

OF 

SALARIES 

AVERAGE 
SALARY 

111.    State    Reformatory,    Pontiac  —  Men  

8 

$    7  416 

$    927 

Ill    State  Normal    Normal  —  Men 

30 

67  880 

2  262 

Western   111     State   Normal     Macomb—  -  Men   

19 

42  000 

2  210 

111.    School    for    Blind     Jacksonville  —  Men    

7 

9  170 

1  310 

8 

11  200 

1  400 

Northern  111    State  Normal    DeKalb  Men 

11 

25  300 

2  300 

15 

31  100 

2  073 

Southern    111     State    Normal     Carbondale  —  Men 

22 

49  800 

2  263 

Eastern    111.    State    Normal,    Charleston  —  Women  
Southern     111.     Normal,    Carbondale  —  Women  

27 
17 

37,089 
22  300 

1,374 
1  312 

Northern   111     State  Normal    DeKalb  —  Women 

34 

39  400 

1  158 

9 

8  211 

912 

111     School   for   Deaf    Jacksonville     Women         .... 

29 

31  598 

1  089 

Ill    School  for  Blind    Jacksonville  —  Women    

18 

19  980 

1  110 

Lincoln  State  School  and  Colony,  Lincoln  —  Women. 
Western   111.    State   Normal,    Macomb  —  Women  

10 
16 

7,620 
24,125 

762 
1  507 

43 

55  588 

1  292 

St    Charles  Boys'  School    St    Charles  —  Women 

13 

9  612 

739 

336 

$499  389 

14 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


201 


CHAPTER  X 


RECENT    DEVELOPMENTS    IN    PENSION    LEG- 
ISLATION   IN    OTHER    STATES    OF   THE 
UNITED   STATES 


SOUND  PENSION  SYSTEMS  NOW  BEING  ADOPTED  BY 
OTHER  STATES 


GENERAL  TREND — Within  the  past  few  years,  there  has  grown 
up  in  this  country  a  marked  tendency  in  the  direction  of  sound  pension 
systems  for  certain  public  employes.  This  statement  does  not  mean 
that  the  bulk  of  pension  legislation  being  enacted  at  the  present  time 
is  of  a  desirable  character.  Indeed,  at  their  latest  sessions,  the  legis- 
latures of  a  number  of  states,  including  California,  Colorado,  Illinois, 
Minnesota,  Nebraska,  New  Jersey,  and  New  York,  enacted  further 
pension  legislation  of  an  unsound  character. 

SCIENTIFIC  SYSTEMS — But  beginning  in  1911  with  the  law  cre- 
ating a  pension  system  for  state  civil  service  employes  of  Massachu- 
setts, there  are  now  added  the  state-wide  teachers'  pension  system  in 
Massachusetts  in  1913,  the  system  for  teachers  of  Erie,  Pennsylvania, 
in  1916,  the  system  for  teachers  in  the  City  of  New  York  in  1917,  and 
the  state-wide  systems  for  teachers  of  Connecticut  and  Pennsylvania 
in  1917. 

Moreover,  bills  for  sound  pension  systems  have  been  recently 
considered  by  a  number  of  states  where  they  have  not  been  thus  far 
enacted  into  law. 

Advance  Marked  in  New  Laws  for  Teachers'  Pensions 

Two  1917  ACTS — The  New  York  and  Pennsylvania  laws  of  1917 
for  teachers  really  represent  a  distinct  advance  over  the  other  laws. 
The  other  laws  provide  for  the  maintenance  of  individuals'  accounts, 
in  which  the  employe  is  credited  with  his  own  contributions,  but  there 
is  no  requirement  that  the  public  set  money  aside  to  accumulate.  It 
is  merely  provided  that  the  money  required  shall  be  appropriated  upon 
the  estimates  of  the  retirement  board. 


202  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

The  laws  of  New  York  and  Pennsylvania  go  further  by  requiring 
also  that  the  contributions  of  the  public  be  set  aside  on  behalf  of  indi- 
vidual employes  at  the  time  service  is  being  rendered. 

AMOUNT  OF  PENSION — With  respect  to  amount  of  pension,  there 
is  in  all  these  systems  given  a  retirement  annunity  equal  to  that  which 
can  be  provided  by  the  accumulated  contributions  by  and  on  behalf  of 
the  individual  employe,  based  on  a  prescribed  table  of  mortality  and 
rate  of  interest.  But  under  the  New  York  and  Pennsylvania  laws 
the  retirement  annunity  is  one-half  the  average  salary  of  the  last  ten 
years  of  service,  if  salary  increases  follow  a  certain  scale. 

REFUNDS — With  respect  to  refunds  of  contributions,  the  funda- 
mental idea  in  each  of  these  systems  is  that  when  an  employe,  after 
contributing  to  a  pension  fund  for  any  time,  is  separated  from  the 
service  by  resignation,  dismissal,  or  death,  his  own  direct  contribu- 
tions should  be  .refunded,  with  interest  at  a  rate  such  as  would  have 
been  obtained  had  he  placed  his  money  in  a  savings  institution. 

Contributions  of  Employe  and  Those  of  Employer  Kept  Separate 

In  all  this  important  legislation,  the  accumulations  from  contribu- 
tions of  the  employe  by  deductions  from  salary  and  those  from  the 
employer  are  kept  separate.  Likewise  the  benefits  that  are  pro- 
vided out  of  contributions  of  the  employe  are  kept  separate  from 
those  that  are  provided  out  of  contributions  of  the  employer.  In  all 
the  systems,  with  the  exception  of  the  state-wide  system  of  Pennsyl- 
vania, the  term  "annuity"  means  payments  for  life  derived  from  con- 
tributions of  the  employe  by  deductions  from  salary,  and  the  term 
"pension"  means  payments  for  life  derived  from  contributions  made 
by  the  public  as  an  employer. 

In  the  state-wide  teachers'  pension  law  of  Pennsylvania,  the  usage 
is  somewhat  different,  in  that  "employe  annuity"  is  used  for  the  pay- 
ments for  life  derived  from  the  contributions  of  the  employe,  and 
"state  annuity"  is  used  to  mean  payments  for  life  from  contributions 
made  by  the  state. 

MASSACHUSETTS   PENSION   SYSTEM   FOR   STATE   EM- 
PLOYES—1911 

CONTRIBUTIONS — The  law  of  1911  provides  that  the  percentage 
of  wages  or  salary  to  be  contributed  by  the  employe  shall  be  fixed  by 
the  retirement  board,  but  shall  not  be  less  than  1,  nor  more  than  5 
per  cent  of  wages  or  salary.  The  board  has  fixed  contributions  at  3 
per  cent  unless  the  employe  elects  to  contribute  5  per  cent. 

CREDIT  FOR  PRIOR  SERVICE — An  important  provision  of  the  law  is 
that  any  member  who  was  in  the  service  of  the  state  at  the  time  the 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


203 


Act  went  into  effect  shall  receive,  in  addition  to  "annuity"  (the  amount 
paid  from  employe's  contributions)  and  "pension"  (the  amount  equal 
to  annuity  obtained  from  contributions  of  the  public),  an  extra  pen- 
sion of  such  amount  that  his  total  retirement  allowance  is  as  large  as 
that  to  which  he  would  have  acquired  a  claim  if  he  had  contributed 
to  the  retirement  system  throughout  his  entire  service. 
May  Retire  Voluntarily  at  Age  60 

RETIREMENT  OF  MEMBERS  —  Retirement  is  voluntary  at  age  60, 
after  15  years  of  continuous  service,  compulsory  at  age  70.  An  em- 
ploye with  35  years  of  service  may  be  retired  at  any  age  for  the  good 
of  the  service. 

AMOUNT  OF  RETIREMENT  ANNUITY — In  no  case  is  the  monthly 
payment  to  a  member  to  be  less  than  $16.67,  or  more  than  one-half 
of  the  amount  of  the  average  salary  or  wage  during  the  ten  years 
prior  to  his  retirement. 

MASSACHUSETTS;    ERIE,    PENNSYLVANIA;    AND    CON- 
NECTICUT SYSTEMS  FOR  TEACHERS 

The  systems  created  under  these  laws  do  not  differ  in  essential 
principles  from  that  for  state  employes  of  Massachusetts  just  dis- 
cussed. There  is  a  difference  in  that  the  percentage  of  salary  to  be  con- 
tributed may  vary  from  3  to  7  per  cent,  instead  of  varying  from  1 
to  5  per  cent.  The  board  in  Massachusetts  has  fixed  5  per  cent  of 
salary  as  the  rate  of  contribution. 

THE  NEW  YORK  CITY  AND  STATE  OF  PENNSYLVANIA 
SYSTEMS  FOR  TEACHERS 

These  systems  certainly  promise  to  be  permanent  institutions. 
They  have,  in  addition  to  the  merits  of  the  other  systems  that  have 
been  discussed,  the  very  commendable  feature  that  the  public  as  an 
employer  is  required  to  pay  currently  into  a  contingent  reserve  fund  a 
certain  per  cent  of  salaries,  so  as  to  make  the  funds  available  at  the  time 
of  retirement  to  pay  the  pensions  promised  from  contributions  of  the 
employer.  Moreover,  the  City  of  New  York  in  the  case  of  its  teachers, 
and  the  State  of  Pennsylvania,  in  the  case  of  its  teachers,  guarantee 
4  per  cent  interest,  compounded  annually,  on  all  funds  contributed  by 
the  employe.  They  also  guarantee  the  payment  of  the  retirement 
allowances  according  to  the  provisions  of  the  act  by  stating  explicitly 
in  the  laws  that  the  payment  of  these  retirement  allowances  is  made 
in  the  one  case  an  obligation  of  the  City  of  New  York,  and  in  the  other 
case  an  obligation  of  the  State  of  Pennsylvania. 


204  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Methods  of  Meeting  Accrued  Liabilities  on  Account  of  Present  Em- 
ployes 

In  starting  a  pension  system  on  a  sound  basis,  great  difficulty 
arises  from  the  fact  that  no  funds  are  available  on  behalf  of  present 
employes.  The  situation  would  in  general  be  relatively  simple  to  deal 
with  if  we  had  to  consider  only  new  entrants  to  the  service.  It  is 
important  to  note  that  the  City  of  New  York  is  to  pay  $1,000,000 
annually  into  the  fund  on  account  of  present  teachers,  until  the  fund 
is  in  a  satisfactory  condition,  as  shown  by  actuarial  valuation.  Simi- 
larly, the  State  of  Pennsylvania  is  to  pay  semi-annually  into  the 
fund  an  amount  equal  to  2.8  per  cent  of  the  total  salaries  paid  to  all 
contributors  during  the  preceding  school  year,  and  in  every  case  an 
amount  at  least  3  per  cent  greater  than  the  second  preceding  semi- 
annual payment.  This  is  to  be  continued  until  the  accumulations  are 
adequate,  when  added  to  future  contributions,  to  meet  future  demands 
on  the  funds.  These  plans  of  New  York  City  and  of  the  State  of 
Pennsylvania  put  the  pension  systems  on  a  basis  analogous  to  the 
basis  of  legal  reserve  life  insurance. 

These  plans  may  appear  on  a  first  reading  to  be  unnecessarily 
complex,  but  it  should  be  said  in  this  connection  that  very  often  what 
appear  to  be  simple  provisions  are  actuarially  impractical,  whereas  the 
statements  that  are  most  satisfactory  and  convenient  for  practical 
operation  on  an  actuarial  basis  may  require  for  precision  a  rather 
technical  phraseology. 

Aim  to  Give  Retirement  Allowance  of  Half  Salary 

It  is  the  aim  of  the  New  York  and  Pennsylvania  laws  to  give  a 
retirement  allowance  of  as  nearly  half  the  average  salary  of  the  last 
ten  years  of  service  as  is  practicable.  The  part  to  be  provided  by  the 
public  contributions,  called  a  "pension"  under  the  New  York  system, 
and  a  "State  Annuity"  under  the  Pennsylvania  system,  is  just  one- 
quarter  of  the  average  salary  of  the  last  ten  years  of  service.  With 
respect  to  the  part  to  be  provided  by  contributions  of  the  employe, 
the  annuity  is  of  such  amount  as  can  be  equitably  provided  with  the 
accumulated  contributions,  and  this  depends  somewhat  on  the  experi- 
ences of  particular  men.  Some  receive  advancements  in  salary  early 
in  the  period  of  service.  These  will  have  more  accumulated  than  neces- 
sary, while  those  who  get  advancement  late  in  the  period  of  service 
have  insufficient  accumulations  to  provide  the  annuity  of  one-quarter 
of  the  average  salary  of  the  last  ten  years  of  service. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  .*)5 

While  the  total  "old  age  retirement  annuity"  may  thus  deviate 
somewhat  from  half  the  average  salary  of  the  last  ten  years  of  service, 
the  half  salary  retirement  annuity  is  provided  in  the  typical  case. 

Permanence  of  These  Systems  Is  Assured 

The  fundamental  basis  of  the  New  York  City  and  Pennsylvania 
systems  is  such  that  they  surely  promise  to  be  permanent  institutions. 
There  is  under  these  systems  definite  provision  to  meet  all  the  future 
obligations  without  increasing  the  per  cent  of  salary  being  paid  at  the 
•present  time.  It  is  the  great  increase  in  cost  as  time  goes  on  that 
brings  disaster  to  a  pension  system  operated  on  any  plan  other 'than 
an  adequate  reserve  plan. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


207 


CHAPTER  XI 


THE  WORLD'S  EXPERIENCE  IN  THE  OPERA- 
TION OF  PUBLIC  SERVICE  PENSION 
SYSTEMS 


It  is  the  purpose  of  the  present  chapter  to  give  in  very  brief  form 
a  notion  of  certain  valuable  experiences  with  the  operation  of  pension 
laws  both  in  various  municipalities  and  states  of  this  country  and  in 
foreign  countries. 

I.     EXPERIENCES  IN  THE  UNITED  STATES 

By  reference  to  the  Report  of  the  Illinois  Pension  Laws  Commis- 
sion of  1916,*  we  note  that  there  are  a  very  large  number  of  laws 
establishing  pension  funds  for  public  employes.  Many  of  these  pen- 
sion laws  have  been  enacted  within  the  past  ten  years. 

While  many  pension  funds  in  the  various  States  have  been  estab- 
lished so  recently  that  their  experiences  are  too  short  to  give  us  any 
valuable  lessons,  we  find  that  some  of  the  larger  cities  have  an  experi- 
ence that  we  cannot  afford  to  overlook.  Moreover,  it  is  in  these  larger 
cities  where  the  conditions  are  really  most  favorable  for  the  establish- 
ment of  sound  pension  systems.  We  shall,  therefore,  examine  the 
experiences  with  pension  funds  in  a  few  large  cities. 

New  York  City's  Experience — Deficiency  of  Over  $170,000,000. 

The  status  of  the  pension  funds  of  New  York  City  is  presented 
in  a  series  of  valuable  reports  recently  published  by  the  Commission 
on  Pensions  of  the  City  of  New  York. 

It  was  shown  in  these  reports  as  the  result  of  careful  investiga- 
tion that  on  June  30,  1914,  there  was  a  deficiency  of  over  $170,000,000 
in  the  amount  of  assets  that  should  exist  to  cover  the  liabilities  as  of 
that  date. 

The  Teachers'  Pension  Fund  involved  in  the  New  York  investi- 
gation has  been  superseded  by  a  fund  created  by  an  act  passed  in  1917 
that  will  put  on  a  sound  actuarial  basis  the  new  Teachers'  Pension 
and  Retirement  Fund  of  New  York  City.  To  be  sure,  this  creation 

*Chapters  II-IV,  Pages  19-71.  Report  of  Illinois  Pension  Laws  Commis- 
sion, 1916. 


208  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

of  a  new  fund  requires  larger  contributions  both  by  teachers  and  by 
the  city,  but  it  represents  a  big  step  in  the  direction  of  sound  pension 
legislation. 

The  Commission  on  Pensions  of  the  City  of  New  York  has  pro- 
posed that  adequate  measures  be  taken  to  deal  with  the  whole  pension 
problem  by  methods  that  will  insure  the  solvency  of  the  funds,  and 
provide  whatever  pensions  are  promised. 
Boston's  Experience  Similar 

The  Commission  on  Pensions  of  Massachusetts  appointed  in  1913 
found  the  three  pension  funds  for  teachers  in  Boston  in  a  state  very 
similar  to  that  just  described  for  New  York. 

System  for  State  Civil  Service  Employes  in  Massachusetts  Estab- 
lished on  Actuarial  Basis 

It  was  a  distinct  step  forward  when  Massachusetts  in  1911 
enacted  a  law  creating  a  pension  system  for  civil  service  employes  of 
the  commonwealth  by  requiring  deductions  from  salary  of  not  less 
than  one  per  cent  nor  more  than  five  per  cent  as  determined  by  the 
Retirement  Board,  and  by  accumulating  the  amounts  thus  contributed 
at  interest.  The  amounts  thus  accumulated  are  to  be  used  at  retirement 
to  provide  an  annuity  on  an  actuarial  basis. 

The  state  is  also  to  provide  an  annuity  equal  to  that  obtainable 
from  the  employe's  contributions. 

A  similar  law  in  Massachusetts  requiring  from  three  per  cent  to 
seven  per  cent  of  salaries  was  passed  in  1913  for  teachers  outside  of 
Boston. 

Recent  Laws  Provide  Sound  Systems  for  Teachers  of  New  York 
City  and  State  of  Pennsylvania 

The  laws  of  Massachusetts  for  civil  service  employes  and  for 
teachers  represent  a  step  forward  although  the  part  of  the  pension 
from  the  state  contribution  is  not  so  secure  as  under  the  law  for  New 
York  City  teachers  in  which  the  employer  makes  contributions  at  the 
time  service  is  rendered  instead  of  merely  promising  to  pay  an  annuity 
equal  to  that  provided  from  contributions  by  the  employe  as  is  the  case 
in  the  Massachusetts  law. 

The  State  of  Pennsylvania  has  followed  closely  the  plan  of  New 
York  City  in  creating  a  state-wide  pension  law  for  teachers. 

The  Systems  for  New  Jersey  Teachers  Cited  as  Examples  of  Un- 
sound Plans 

As  an  example  of  experience  with  unsound  pension  schemes,  we 
may  take  the  experience  of  the  State  of  New  Jersey  with  teachers' 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


209 


pensions.  The  State  of  New  Jersey  has  had  two  state-wide  pension 
plans  -for  teachers  and  has  had  considerable  disastrous  experience.  The 
history  of  the  older  of  the  two  plans  began  in  1896  when  the  legislature 
created  the  Board  of  Trustees  of  Teachers'  Retirement  Funds.  The 
plan  required  contributions  of  one  per  cent  of  salary,  and  promised 
ridiculously  large  benefits  compared  to  this  source  of  income.  It  was 
provided  further  that  if  there  were  insufficient  resources  in  the  funds 
to  pay  the  annuities,  the  state  treasurer  was  to  register  the  warrants 
thus  necessarily  unpaid,  and  as  money  was  received,  all  orders  were 
to  be  paid  with  interest  at  five  per  cent  until  the  fund  was  at  least  equal 
to  its  liabilities.  The  acceptance  of  the  assumption  that  at  some  time 
the  fund  would  so  increase  as  to  equal  its  liabilities  looks  like  a  case 
of  native  simplicity. 

The  second  system  of  New  Jersey  dates  to  a  law  enacted  in  1903 
and  amended  in  1906  and  1912.  Under  this  law  local  school  boards  are 
required  to  pay  out  of  local  school  funds  a  pension  amounting  to  one- 
half  of  the  average  annual  salary  of  the  past  five  years  to  any  teacher 
with  thirty-five  years  of  service  in  public  school  work,  provided  twenty 
years  were  in  the  schools  of  the  local  educational  authority  by  whom 
the  pension  must  be  paid. 

In  the  present  year,  1918,  the  Bureau  of  State  Research  of  New 
Jersey  has  published  drastic  criticisms  of  the  pension  situation  of  the 
state.  One  of  these  publications  is  on  Teachers'  Retirement  Systems 
in  New  Jersey — Their  Fallacies  and  Evolution;  another  is  devoted  to 
employes  other  than  teachers.  These  publications  urge  the  necessity 
of  reorganization  on  a  reserve  basis. 

Summary  —  Most  State  Laws  Are  "Horrible  Examples,"  a  Few 
Exceptions  Afford  Models 

Taken  as  a  whole,  we  may  say  that  with  only  a  few  exceptions, 
the  laws  of  the  various  states  for  pensions  of  public  employes  have 
been  enacted  with  almost  utter  disregard  for  the  disastrous  experiences 
contained  in  the  history  of  unsound  pension  plans.  It  is  just  the  few 
exceptional  cases,  such  as  the  laws  for  the  New  York  City  and  the 
Pennsylvania  teachers,  however,  that  are  important ;  for,  they  are  show- 
ing the  way  to  really  sound  pension  legislation,  and  involve  such  large 
groups  as  to  be  really  very  significant  in  the  movement  for  sound 
pension  systems. 


210  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

II.     EXPERIENCES  IN  GREAT  BRITAIN 
Has  Had  Civil  Service  Pensions  for  Over  a  Century 

The  British  Government  has  had  more  than  a  century  of  experi- 
ence in  attempting  by  the  payment  of  pensions,  to  solve  the  problem 
of  retirement  from  the  civil  service.  Various  laws  were  in  force  up 
to  1857.  In  1810,  under  a  general  act,  the  government  began  the  pay- 
ment, out  of  the  revenue  of  the  country,  of  retiring  allowances  to 
civil  service  employes. 

Parliament  passed  a  law  in  1822  requiring  that  half  the  super- 
annuation allowances  granted  after  that  date  should  be  paid  out  of  the 
funds  created  by  deductions  from  salaries.  Two  years  later  the  act 
was  repealed,  and  the  sums  contributed  up  to  that  time  were  returned. 

From  1824  to  1829  pensions  were  granted  on  a  liberal  basis  with- 
out deductions  from  salaries  of  the  employes. 

Contributory  from  1829  to  1857 

From  1829  to  1857,  a  contributory  system  was  in  force  for  all 
who  entered  the  civil  service  subsequent  to  August  4,  1829.  The 
deductions  from  salary  were  two  and  one-half  per  cent  from  salaries 
not  exceeding  one  hundred  pounds  ($486.66)  per  annum,  and  five  per 
cent  from  salaries  exceeding  that  amount.  This  act  contained  no  pro- 
vision that  amounts  thus  collected  should  be  funded  and  accumulated 
at  interest.  The  general  feeling  of  dissatisfaction  that  developed  among 
the  employes  was  due  largely  to  the  fact  that  no  refunds  were  provided 
for  in  case  of  withdrawal. 

The  discontent  with  the  conditions  became  so  intense  that  in  1846 
the  employes  formed  an  association  for  the  purpose  of  bringing  their 
grievances  before  Parliament.  This  association  worked  on  various 
plans  for  ten  years,  and  presented  its  claims  before  a  select  committee 
of  the  House  of  Commons  in  1856. 

Two  actuaries  were  appointed  to  investigate  the  question  as  to 
whether  the  deductions  from  salary  were  more  than  adequate  to  pay 
the  pensions.-  Contrary  to  expectations,  the  actuaries  found  that  the 
contributions  were  inadequate  to  pay  the  pensions  and  that  if  the 
system  had  depended  upon  contributions  only  it  would  have  been  hope- 
lessly insolvent.  The  provision  requiring  deductions  from  salaries  was 
repealed  in  1857,  and  an  act  was  passed  in  1859  which  established  a 
system  of  non-contributory  pensions. 

Non-Contributory  Law  in  Force  from  1859  to  1909 

The  system  of  non-contributory  pensions  created  by  the  Act  of 
1859  was  not  satisfactory  to  the  employes.  After  the  system  was  in 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


211 


force  for  some  time,  the  view  came  to  be  held  that  the  pension  was 
taken  into  account  in  fixing  salaries ;  in  other  words,  that  the  employes, 
because  of  their  pension  prospects,  were  being  paid  less  than  they 
would  otherwise  receive.  A  committee  consisting  of  70,000  of  the 
total  of  100,000  employes,  which  took  the  name  "Deferred  Pay  Com- 
mittee," pressed  the  claims  of  employes  so  vigorously  that  the 
Courtney  Commission  was  appointed  in  1902  to  investigate  their 
grievances. 

Insurance  Included  in  the  Present  Law — Act  of  1909 

In  accord  with  the  recommendation  of  the  Courtney  Commission 
a  law  was  passed  in  1909  reducing  the  amount  of  pension  by  one- 
quarter,  and  substituting,  in  place  of  this  part  of  the  pension,  benefits 
in  the  form  of  insurance  against  death  and  cash  payments  in  case  of 
withdrawals  from  the  service  before  receiving  a  pension. 

The  reduced  pension  under  this  law  is  thus  one-eightieth  of  the 
average  annual  salary  for  each  year  of  service,  instead  of  one-sixtieth 
as  had  been  the  case  in  1859.  In  addition  the  treasury  is  authorized 
to  give  a  retiring  employe  a  lump  sum  of  one-thirtieth  of  the  average 
annual  salary  multiplied  by  the  number  of  years  of  service,  provided 
the  additional  allowance  shall  not  exceed  one  and  one-half  times  the 
average  salary.  Continuance  in  active  service  after  age  65  is  dis- 
couraged by  reducing  the  additional  allowance  in  case  of  service  after 
this  age. 

Cost  of  Civil  Service  Pensions  Expressed  in  Percentage  of  Cor- 
responding Salaries  of  the  Active  Staff 

The  ratio  of  pension  payments  to  salary  payments  depends  on 
several  factors.  When  a  department  is  relatively  new,  or  has  experi- 
enced a  period  of  rapid  growth  within  the  past  twenty  or  twenty-five 
years,  it  is  likely  to  have  a  relatively  large  number  of  young  men  on 
the  salary  roll.  On  the  other  hand>  if  a  department  is  decreasing  in 
number  by  failing  to  fill  vacancies,  it  will  probably  have  a  relatively 
large  number  of  old  men. 

It  was  reported  before  the  Courtney  Comission  in  1902  that 
the  ratio  of  pension  payments  to  salary  payments  was  only  about  six 
per  cent  in  the  Post  Office  Department,  whereas  in  the  Customs  and 
Treasury  Departments  the  ratio  was  about  thirty  per  cent.  The  ratio 
of  pension  payments  to  salary  payments  for  the  entire  service  was 
between  sixteen  and  seventeen  per  cent. 

As  an  additional  illustration,  we  note  that  in  1915,  the  London 
Metropolitan  Police  had  a  payroll  amounting  to  $10,060,914  for  salaries 


212  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

and  $2,946,919  for  the  payment  of  pensions,  from  which  we  find  that 
the  current  cost  of  pensions  is  over  twenty-nine  per  cent  of  salaries. 

Teachers'  Pensions  in  Great  Britain  Since  1846  —  Law  Requires 
Actuarial  Examination  of  F'inds 

Pensions  for  certain  teachers  have  been  paid  in  Great  Britain 
since  1846.  In  1862,  action  was  taken  which  made  it  impossible  to  add 
to  the  existing  pension  roll,  but  this  action  was  without  prejudice  to 
the  validity  of  pensions  already  granted.  In  1875,  provision  was  made 
to  grant  further  pensions,  but  with  decided  limitations  as  to  the  num- 
ber of  pensions  to  be  allowed  in  England  and  Scotland  together. 

The  Elementary  School  Teachers  (Superannuation)  Act  of  1898 
was  the  law  through  which  Parliament  for  the  first  time  established 
state  pensions  for  teachers.  The  age  of  retirement  was  made  65  years. 
The  law  was  amended  in  1912  increasing  the  contributions. 

Under  the  present  provisions  a  man  with  forty  years  of  service  at 
age  65  receives  a  pension  of  seventy-eight  pounds  ($379.59),  of  which 
thirty-eight  pounds  ($184.93)  are  provided  by  his  contributions  and 
forty  pounds  ($194.66)  from  public  funds.  A  woman,  65  years  of 
age,  with  forty  years  of  service,  receives  fifty-nine  pounds  ($287.12). 
Provision  is  made  for  the  actuarial  examination  of  the  funds  at  stated 
times  to  determine  whether  the  experience  is  in  accord  with  expec- 
tations. 

III.  EXPERIENCES  IN  GERMANY 

The  provisions  for  civil  service  pensions  apply,  in  general,  to 
teachers  and  officers  in  the  secondary  and  higher  schools,  but  not  to 
university  teachers.  The  latter  continue  to  draw  their  full  salary  for 
life  although  they  are  retired  from  active  teaching. 

As  in  England,  we  find  the  pensions  for  government  employes 
on  a  non-contributory  basis.  It  is  estimated,  in  general,  that  the 
salaries  are  kept  lower  than  those  paid  for  similar  work  outside  the 
government  service.  So  far  as  government  employes  are  concerned, 
there  seems  to  be  very  little  difference  in  principle  in  the  German  and 
English  systems.  Germany,  in  general,  includes  teachers  in  this  non- 
contributory  system,  whereas  in  England  the  system  for  teachers  is 
distinct  and  is  contributory  to  the  extent  of  providing  about  one-half 
of  the  benefits. 

IV.  EXPERIENCES  IN  AUSTRO-HUNGARY 

In  Austro-Hungary  there  is  a  thoroughly  developed  system  of 
pensions  for  government  employes,  which  dates  back  to  1771.  It 
provides  for  widows,  and  orphans  when  both  parents  are  dead.  Unfor- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  213 

tunately,  there  are  in  reality  about  forty  different  pension  systems  in 
Austro-Hungary  for  different  classes  of  civil  service  employes.  The 
widows  obtain  about  one-third  of  the  active  pay,  and  orphans  about 
one-fifteenth  each  of  the  active  pay. 

Mr.  Blascke,  the  noted  actuary,  has  expressed  the  opinion  that 
the  pension  situation  has  already  probably  entered  into  substantially 
its  constant  period.  The  annual  pension  payments  amount  to  between 
thirty  and  forty  per  cent  of  active  salaries. 

V.  EXPERIENCES  IN  FRANCE 

Under  the  law  of  April  5,  1910,  France  has  a  system  of  pensions 
that  is  in  the  nature  of  annuities  provided  by  equal  payments  from 
employes  and  employers  into  the  funds  created  and  to  be  used  in 
accord  with  actuarial  principles.  This  pension  law  applies  not  only 
to  wage  earners  of  all  trades  and  professions  but  also  to  public  employes 
not  entitled  to  retiring  allowances  under  previous  laws  and 
regulations. 

The  most  important  group  exempted  from  the  system  inaugurated 
by  the  law  of  1910  is  the  one  composed  of  public  employes  subject  to 
the  law  of  1853.  This  group  receives  annuities  paid  directly  from  the 
public  exchequer,  but  deductions  are  made  from  salaries.  In  general, 
France  makes  comparatively  large  deductions  from  salaries  to  provide 
pensions. 

VI.  EXPERIENCES  IN  NEW  ZEALAND 

On  account  of  the  fact  that  New  Zealand  has  been  one  of  the 
most  progressive  countries  in  matters  of  pension  plans  and  has  tried 
various  methods  of  dealing  with  the  superannuation  problem,  it  seems 
worth  while  to  include  this  country  in  our  study  of  experiences. 

The  plan  of  granting  straight  pensions  and  gratuities  out  of  the 
treasury  was  begun  in  1858,  and  continued  for  thirteen  years,  when 
it  was  abolished  chiefly  because  of*  the  cost  of  proceeding  with  the 
plan.  For  the  next  thirteen  years,  the  government  merely  granted 
"compensation"  (compensation  for  the  loss  of  office)  amounting  to 
one  month's  salary  for  each  year  of  service.  From  1886  to  1893,  five 
per  cent  was  deducted  from  the  salaries  of  civil  service  employes  to 
be  invested  and  returned  with  interest  when  such  employes  left  the 
public  service.  In  1893  there  was  adopted  compulsory  insurance 
through  the  government  life  insurance  office. 

The  general  law  enacted  in  1907  applies  to  all  permanent  civil 
service  employes  not  included  in  police,  teachers'  and  railway  funds. 
All  new  entrants  into  the  civil  service  are  compelled  to  join  the  fund. 


214  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

It  is  a  noteworthy  feature  that  the  rate  of  contribution  varies  from 
five  to  ten  per  cent  of  the  salary,  depending  upon  the  age  of  the  entrant 
into  the  service. 

The  plans  under  the  special  act  for  policemen,  teachers  and  rail- 
way officers  do  not  differ  essentially  from  the  plan  under  the  general 
act. 

LESSONS  TO  BE  DRAWN  FROM  THE  EXPERIENCES  OF 
FOREIGN  COUNTRIES 

It  is  correct  to  say  that  in  the  practice  of  foreign  countries,  we 
find  precedents  for  a  great  variety  of  systems.  We  find  that  the  sys- 
tems vary  from  those  operating  loosely  without  much  regard  for  the 
probable  future  cost,  to  those  kept  actuarially  sound  on  the  theory 
that  for  each  class  of  persons  of  given  age  and  service  there  should 
be  accumulating  a  sufficient  fund  to  pay  their  pensions. 

Main  Lesson  is:    Provide  an  Adequate  Reserve  Fund 

It  is  not  likely  that  countries  which  began  non-contributory  pen- 
sions sixty  years  ago  had  the  foresight  to  predict  the  present  cost,  but 
fortunately  at  the  present  time  experience  has  taught  us  what  we  may 
expect  if  we  operate  a  pension  system  with  little  or  no  regard  to  an 
adequate  reserve  fund.  The  testimony  that  some  departments  of  the 
government  in  England,  Germany  and  Austro-Hungary  pay  thirty  to 
forty  per  cent  as  much  for  pensions  as  for  salaries  is  the  answer  of 
experience. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  215 


CHAPTER  XII 


SUMMARY  OF  REPORT  OF  ILLINOIS  PENSION 
LAWS  COMMISSION  OF  1916 


Gave  Figures  Showing  Existing  Pension  Funds  Unsound — Lack- 
ing Adequate  Provision  to  Meet  Payments  Promised 
It  is  the  purpose  of  the  present  chapter  to  summarize  the  Report 
of  the  Illinois  Pension  Laws  Commission  of  1916  in  such  a  way  as  to 
emphasize  a  few  important  points,  and  to  give  a  general  notion  of  the 
field  covered  by  that  report,  together  with  page  references  for  con- 
venience of  the  interested  reader,   who  wishes  to  examine  in  more 
detail  the  results  of  the  investigations  mentioned  in  this  brief  summary. 
The  Report  of  1916  was  devoted  mainly  to  the  following: 

1.  A  comprehensive  actuarial  investigation  of  the  financial 
condition  of  the  five  chief  pension  funds  of  Illinois. 

2.  An  account  of  the  operation  of  pension  laws  for  public 
employes  in  other  countries. 

3.  A  historical  sketch  of  the  operation  of  pension  laws  for 
public  employes  in  Illinois. 

4.  Provisions  of  pension  laws  for  public  employes  in  other 
states. 

5.  Data  on  the  extent  of  public  employment  in  Illinois  with 
tenure    such    that    employes    may    reasonably    be    included    in    a 
pension  system. 

6.  Statistical  data  relating  to  each  fund  in  Illinois. 

7.  The  underlying  principles  of  a  sound  pension  system. 

8.  Concrete   provisions    of   a   normal   or   standard   pension 
system. 

9.  Specific    recommendations    with    respect    to    immediate 
legislation. 

I.     ACTUARIAL    INVESTIGATIONS    INTO    THE    FINAN- 
CIAL CONDITION  OF  THE  FIVE  CHIEF  FUNDS  IN 
ILLINOIS  (REPORT  OF  1916,  PAGES  72-199) 
Actuarial  investigations  were  made  of  the   five  chief   funds  of 
the  state.    Each  of  the  remaining  funds  involved  too  small  a  number 
of  employes  in  the  group  to  form  a  really  sound  fund.   We  shall  com- 
ment briefly  upon  some  of  the  significant  results  obtained  frgrn  exam- 
ination of  each  of  the  five  funds, 

15 


216  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

$30,000,000  Deficiency  in  the  Police  Fund  of  Chicago.  (Report  of 
1916,  Pages  72-103) 

There  was  found  a  deficiency  of  over  $30,600,000;  that  is  to  say, 
it  was  found  that  in  order  to  provide  adequate  reserves  it  would  require 
over  $30,600,000  besides  the  future  contributions  of  employes  provided 
for  by  law,  to  carry  out  this  pension  plan  on  behalf  of  present  employes 
and  present  pensioners. 

If  the  equivalent  of  $30,600,000  is  not  provided  to  cover  this 
deficiency  either  the  per  cent  of  salaries  contributed  by  employes  and 
the  city  must  be  increased  or  the  benefits  must  be  decreased. 

When  the  experience  reaches  the  point  where  the  system  is 
carrying  its  ultimate  normal  load  the  outlay  for  pensions  every  year 
will  be  34.3  per  cent  of  the  payroll.  Stated  in  amounts  rather  than  in 
per  cent  of  salary  of  active  employes,  we  may  say  that  if  the  body  of 
employes  should  remain  stationary  at  4,830  men,  the  pension  payments 
would  increase  to  $912,376  per  year  for  men  and  $1,296,858  per  year 
for  widows  and  children.  This  gives  a  total  of  $2,209,233,  which  on 
the  basis  of  present  salaries  is  34.3  per  cent  of  the  payroll. 

It  is  an  important  observation  that  under  the  present  plans,  pen- 
sions to  widows  will  cost  a  good  deal  more  than  the  pensions  of 
employes.  (Report  of  1916,  page  94.) 

On  Proper  Reserve  Basis  Would  Cost  13.6  Per  Cent 

The  scheme  of  financing  that  consists  in  creating  proper  reserves 
by  contributions  of  employer  and  employe  at  the  time  service  is  ren- 
dered would  require  at  all  times  a  total  contribution  of  13.6  per  cent 
of  salaries  to  be  set  aside  at  4  per  cent  interest  to  provide  the  benefits. 

The  law  for  the  police  fund  has  a  loosely  drawn  provision  for 
reserves  on  new  entrants.  If  these  reserves  should  consist  in  setting 
aside  for  the  benefit  of  such  new  entrants  an  amount  equal  to  13.6 
per  cent  of  all  salary  payments  of  the  policemen,  it  would  result,  with 
the  size  of  the  police  force  of  January  1,  1916,  that  it  would  require 
on  behalf  of  the  219  new  men  per  annum  necessary  to  keep  up  the 
service,  the  following  amounts  per  annum,  depending  .upon  the  year 
of  operation: 


Year  of 

Amount  to  be 

Year  of 

Amount  to  be 

Operation 

Set  Aside 

Operation 

Set  Aside 

I 

$  35,000 

20 

$635,000 

5 

175,000 

25 

755,000 

10 

339,000 

30 

848,000 

15 

493,000 

35 

879,000 

ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  217 

Cost  Under  Police  Fund  Law  Will  Rise  to  40  Per  Cent  of  Salaries 
The  1916  Report  of  the  Illinois  Pension  Laws  Commission,  pages 
101-102,  showed  that  if  the  number  of  active  employes  (4830)  should 
remain  constant,  the  pensions  would  in  twenty  years  from  1916  be 
costing  over  30  per  cent  of  salaries  and  that  in  forty  years  they  would 
be  costing  34.3  per  cent  of  salaries.  If  the  financing  is  done,  as  pro- 
vided in  the  police  fund  law,  by  creating  reserves  on  new  entrants 
after  January  1,  1916,  and  requiring  the  balance  needed  to  be  provided 
on  a  cash  disbursement  basis,  the  maximum  current  load  will  come 
about  1940.  At  that  time,  the  current  load  would  be  about  $2,600,000, 
which  equals  40  per  cent  of  the  salaries. 

$13,000,000  Deficiency  in  the  Firemen's  Fund  of  Chicago,  (Report 
of  1916,  Pages  104-123) 

There  was  found  a  deficiency  of  over  $13,700,00;  that  is  to  say, 
it  wras  found  that  in  order  to  provide  adequate  reserves,  it  would 
require  over  $13,700,000  besides  the  future  contributions  of  employes 
provided  for  by  law  to  carry  out  the  present  plan  on  behalf  of  pres- 
ent employes  and  present  pensioners. 

When  the  experience  has  reached  the  point  where  the  system  is 
carrying  its  ultimate  normal  load  the  outlay  for  pensions  every  year 
would  be  36.6  per  cent  of  the  payroll.  Stated  in  amounts  rather  than 
in  per  cents  of  salary  of  active  employes,  we  may  say  that  if  the  num- 
ber of  firemen  should  remain  stationary  at  1973  men,  the  pension  pay- 
ments would  increase  to  $512,960  per  year  for  men  and  $559,914  per 
year  for  widows  and  children. 

This  gives  a  total  of  $1,072,874,  which  is  36.6  per  cent  of  the 
salary  payroll.  The  scheme  of  financing  that  consists  in  creating  proper 
reserves  would  require  only  15.87  per  cent  of  salaries  to  provide  the 
benefits  after  the  reserve  plan  is  in  full  operation. 

The  general  condition  of  the  firemen's  fund  is  entirely  similar  to 
that  of  the  police  fund  as  explained  above. 

$5,000,000  Deficiency  in  the  Teachers'  Fund  of  Chicago.     (Report 

of.  1916,  Pages  124-146) 

There  was  found  a  deficiency  of  over  $5,600,000;  that  is  to  say 
it  was  found  that  in  order  to  provide  adequate  reserves  it  would  require 
over  $5,600,000  besides  the  future  contributions  of  teachers  and  of 
the  board  of  education  as  provided  by  law,  to  carry  out  the  pension 
plan  on  behalf  of  present  teachers.  When  the  system  has  reached  the 
point  where  it  is  carrying  its  ultimate  normal  load  the  outlay  for  pen- 
sions per  year  would  be  7.06  per  cent  of  the  payroll. 


218  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

The  present  value  of  the  deficiency  of  $5,601,199,  shown  in  the 
balance  sheet  (Report  of  1916,  page  146),  is  due  to  the  accrued  liabili- 
ties that  were  assumed  when  the  pension  system  was  started  and  to 
the  fact  that  the  system  was  in  operation  for  a  number  of  years  before 
the  Board  of  Education  began  to  contribute  on  the  present  basis. 

However,  the  contributions  are  not  sufficient  to  pay  both  the  pen- 
sions and  the  interest  on  the  deficiency  and  the  deficiency  will  increase 
under  the  present  conditions. 

$7,000,000  Deficiency  in  the  Municipal  Employes  Fund  of  Chicago. 
(Report  of  1916,  Pages  147-160) 

The  deficiency  of  January  1,  1916,  was  perhaps  in  the  neighbor- 
hood of  $7,000,000.  This  fund  had  at  that  time  had  no  experience 
with  the  payment  of  pensions,  but  had  been  merely  accumulating  funds 
during  the  first  five  years  of  its  existence.  The  actuaries  were  there- 
fore obliged  merely  to  assume  some  age  of  retirement,  and  this 
deficiency  of  $7,000,000  corresponds  to  assumptions  that  retirements 
will  take  place  on  the  average  at  about  sixty  years. 

Percentage  Estimate  on  Illinois  State  Teachers'  Pension  and  Re- 
tirement Fund.     (Report  of  1916,  Pages  161-167) 

The  available  data  on  this  fund  was  too  limited  on  January  1, 
1916,  to  estimate  with  fair  accuracy  the  accrued  liability.  It  was  neces- 
sary to  make  assumptions  as  to  the  rates  of  withdrawal  and  retirement 
at  different  ages.  On  the  basis  of  the  data  which  were  collected  on 
over  21,000  teachers  it  seemed  fairly  safe  to  say  that  in  the  ultimate 
state,  the  pension  payments  each  year  would  amount  to  a  sum  between 
seven  and  twelve  per  cent  of  the  annual  salary  payments. 

II.     OPERATION  OF  PENSION  LAWS  IN  OTHER  COUN- 
TRIES.    (REPORT  OF  1916,  PAGES  19-35) 

In  many  foreign  countries  retirement  allowances  are  paid  to  public 
employes  in  all  cases  where  the  tenure  of  office  is  practically  perma- 
nent. There  is  a  decided  contrast  between  this  condition  and  that 
which  exists  in  the  United  States.  Our  federal  government  makes  no 
provision  for  pensions  for  civil  service  employes.  The  contrast  is  the 
more  striking  when  we  take  into  account  the  fact  that  the  United 
States  pays  enormous  amounts  of  war  pensions  in  comparison  with 
those  of  foreign  countries.  In  England  and  other  European  countries 
the  problem  of  pensions  for  government  employes  has  received  atten- 
tion for  more  than  one  hundred  years,  and  pensions  have  been  paid 
since  that  time.  During  this  time  many  unsuccessful  experiments  have 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


219 


been   attempted,   which    we,    in   this    country,    are    inclined,    perhaps 
unwittingly,  to  repeat. 

"It  is  not  likely  that  countries  which  began  non-contributory  pen- 
sions sixty  years  ago  had  the  foresight  to  predict  the  present  cost,  but 
fortunately  at  the  present  time  experience  has  taught  us  what  we  may 
expect  if  we  operate  a  pension  system  with  little  or  no  regard  to  an 
adequate  reserve  fund.  The  testimony  that  some  departments  of  the 
governments  in  England,  Germany  and  Austro-Hungary  pay  from 
thirty  to  forty  per  cent  as  much  for  pensions  as  for  salaries  is  the 
answer  of  experience."  (Report  of  1916,  page  35.) 

III.  HISTORICAL    SKETCH     OF    PENSION    LAWS    FOR 

PUBLIC   EMPLOYES    OF   ILLINOIS.     (REPORT   OF 

1916,  PAGES  36-41;  PAGES  205-265) 

Beginning  in  the  year  1852  a  large  number  of  pension  laws  have 
been  enacted  in  Illinois.  The  first  general  Illinois  pension  law  for 
public  employes  was  enacted  in  1874.  It  gave  cities  the  authority  to 
establish  funds  for  the  benefit  of  policemen  and  firemen  disabled  in 
the  discharge  of  duty  and  for  their  dependents  if  they  were  killed. 
The  benefits  have  been  greatly  extended  to  include  service  pensions 
and  benefits  to  dependents  even  when  no  injury  was  received  in  the 
performance  of  duty.  A  tabular  digest  showing  these  extensions  is 
given  on  pages  205-239  of  the  Report  of  1916.  Furthermore,  teachers, 
municipal  employes,  and  certain  other  special  groups  now  have  pension 
systems.  Indeed  about  55,000  public  employes  in  Illinois  are  involved 
in  some  pension  system. 

There  are  sixteen  distinct  laws  in  force.  For  fifteen  of  these 
laws  a  tabular  digest  is  shown  on  pages  241-265,  Report  of  1916, 
and  the  remaining  law,  which  is  for  teachers  in  state  institutions, 
simply  duplicates  the  provisions  of  the  law  for  the  Illinois  State 
Teachers  Pension  and  Retirement  Fund. 

IV.  PROVISIONS   OF   PENSION   LAWS   OF   OTHER 

STATES.     (REPORT  OF  1916,  PAGES  42-71) 

As  shown  in  this  part  of  the  1916  Report,  there  is  an  immense 
amount  of  legislation  on  the  statute  books  of  various  states  pertain- 
ing to  pensions  for  policemen  and  firemen,  a  lesser  amount  for  teachers, 
and  an  appreciable  but  smaller  amount  for  certain  other  municipal 
and  state  civil  service  employes.  The  specific  provisions  of  these 
laws  are  so  varied  in  their  character  that  it  seems  impossible  to  give 
in  very  brief  space  a  valuable  notion  of  the  provisions.  But  it  is  a 
fair  statement  that,  with  but  few  exceptions,  the  benefits  are  promised 


2JO  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

with   practically   no   regard   to   the   cost   or   to   adequate  methods   of 
providing  the  funds  necessary  to  pay  the  benefits. 

The  laws  of  Massachusetts  for  teachers  and  for  civil  service  em- 
ployes furnish  an  important  exception.  It  is  perhaps  well  to  say  here 
that  New  York,  Pennsylvania  and  Connecticut  laws  for  teachers 
enacted  since  .the  publication  of  the  1916  Report  are  also  exceptions 
to  the  statement.  These  sound  pension  laws  are  discussed  in  Chap- 
ter X. 

V.  DATA  ON  THE  EXTENT  OF  PUBLIC  EMPLOYMENT 

IN  ILLINOIS  WITH  TENURE  SUCH  THAT  THE  EM- 
PLOYE MAY  REASONABLY  BE  INCLUDED  IN  A 
PENSION  SYSTEM.  (REPORT  OF  1916,  PAGES  200- 
203) 

It  was  found  that  "on  January  1,  1916,  there  were  in  Illinois 
77,791  public  service  employes.  Of  these,  30,550  were  under  civil 
service  and  47,241,  including  34,191  teachers,  not  under  civil  service. 
Of  the  77,791  public  service  employes,  55,350  were  under  pension 
legislation  and  22,441  were  not  under  pension  legislation.  Of  the 
22,441  not  under  pension  legislation,  9,906  were  under  civil  service. 
Those  consist  of  State  employes,  5,509;  employes  other  than  police- 
men in  the  park  systems  in  Chicago,  2,790;  county  employes,  1,248; 
and  employes  in  Springfield  and  Evanston  other  than  policemen  and 
firemen,  359."  (Report  of  1916,  page  18.) 

As  explained  in  the  Report  of  1916,  page  200,  some  of  the  figures 
are  accurate  while  others  are  merely  rough  estimates. 

VI.  STATISTICAL  DATA  RELATING  TO  EACH  FUND  IN 

ILLINOIS.     (REPORT   OF   1916,   PAGES   168-199) 

This  includes  financial  statements  from  funds  that  involve  too 
few  employes  for  an  actuarial  investigation  and  certain  data  from 
the  larger  funds  that  were  not  presented  in  the  actuarial  report. 

VII.  THE  UNDERLYING  PRINCIPLES  OF  A  SOUND  PEN- 
SION  SYSTEM.     (REPORT  OF  1916,  PAGES  271-284) 

Under  this  topic,  the  following  questions  are  considered : 

(a)  Whom  does  a  pension  system  for  public  employes  benefit? 
(Loc.  cit.  pp.  273-275.) 

(b)  Who  should  be  beneficiaries?     (Loc.  cit.  pp.  275-278.) 

(c)  What  age  and  length  of  service  should  be  required  for  a 
pension?     (Loc.  cit.  pp.  278-280.) 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  221 

(d)  What  should  be  the  method  of  providing  funds  to  pay  pen- 
sions?    (Loc.  cit.  pp.  280-283.) 

(e)  Granting  that  employer  and  employe  should  both  contribute, 
what   should   be  the  ratio   of   the  contributions   of  the  public   as   an 
employer  to  fhose  of  employes?    (Loc.  cit.  p.  283.) 

(f )  What  should  the  plan  of  management  of  a  pension  fund  be? 
(Loc.  cit.  p.  284.) 

VIII.  CONCRETE  PROVISIONS   OF  A  NORMAL   OR 
STANDARD    PENSION    PLAN.     (REPORT    OF    1916, 
PAGES  285-294) 

The  suggested  provisions  were  intended  to  be  merely  of  a  ten- 
tative or  illustrative  character,  but  they  show  one  of  many  ways  of 
putting  into  concrete  provisions  the  underlying  principle  that  funds 
to  pay  pensions  should  be  provided  on  a  reserve  basis  by  setting  aside 
for  accumulation  at  interest  proper  amounts  to  pay  the  pensions 
promised. 

IX.  SPECIFIC     RECOMMENDATIONS     WITH     RESPECT 

TO  IMMEDIATE  LEGISLATION.     (REPORT  OF  1916, 
PAGES  299-302) 

It  is  clear  from  the  Report  of  1916,  page  299,  that  the  recom- 
mendations are  made  with  a  view  to  improving  somewhat  the  con- 
ditions of  some  of  the  larger  funds  that  urgently  need  attention,  and 
not  with  the  thought  that  the  changes  proposed  would  create  a  situa- 
tion that  should  not  be  subject  to  thoroughgoing  revision  along  the 
lines  of  the  underlying  principles  of  a  sound  pension  system. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


223 


CHAPTER  XIII 


EFFECTS  OF  THE  PENSION  LEGISLATION  OF 

1917  BY  THE  FIFTIETH  GENERAL 

ASSEMBLY  OF  ILLINOIS 


Existing  Funds  Still  Left  on  Unsound  Basis — Without  Permanent 
Provision  to  Meet  Their  Accrued  and  Accruing  Liabilities 

Pension  legislation  of  the  Fifteenth  General  Assembly  involved 
the  enactment  of  one  new  act,  namely,  that  creating  a  State  Institutions 
Teachers  Pension  and  Retirement  Fund,  and  the  revision  of  acts  rela- 
tive to  the  funds  for  Chicago  policemen,  Chicago  firemen,  Chicago 
municipal  employes,  policemen  in  cities  of  5,000  to  100,000  population, 
and  firemen  in  cities  of  5,000  to  200,000  population. 

CREATION  OF  STATE  INSTITUTIONS  TEACHERS  PEN- 
SION AND  RETIREMENT  FUND 

This  extends  to  teachers  in  state  educational,  correctional,  and 
charitable  institutions  (excluding  the  University  of  Illinois)  supported 
in  whole  or  in  part  by  public  moneys  of  the  state  the  same  provisions 
as  to  benefits  and  as  to  contributions  of  employes  as  exist  for  public 
school  teachers  under  the  Illinois  State  Teachers  Pension  and  Retire- 
ment Fund.  The  revenue  from  other  sources  than  employes'  con- 
tributions consists  of  donations,  legacies,  etc.,  and  such  funds  as  the 
General  Assembly  shall  from  time  to  time  appropriate,  and  other 
moneys  received  from  any  legal  source. 


224  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

REVISION  OF  THE  ACTS  RELATING  TO  EXISTING 
FUNDS  FOR  CHICAGO  POLICEMEN,  CHICAGO 
FIREMEN,  CHICAGO  MUNICIPAL  EMPLOYES,  PO- 
LICEMEN IN  CITIES  OF  5,000  TO  100,000  POPULA- 
TION, AND  FIREMEN  IN  CITIES  OF  5,000  TO  200,000 
POPULATION 

The  chief  features  of  the  revision  of  these  acts  are  the  following: 

1.  Increase  in  financial  support. 

2.  Modification  in  one  law  involving  a  possible  decrease  in  finan- 
cial support. 

3.  Fixing  a  minimum  age  of  retirement  of  policemen  and  fire- 
men in  Chicago. 

4.  Change  in  pensions  for  widows  of  policemen  in  Chicago,  and 
change   in   pensions   of   children   of   both   policemen   and   firemen   in 
Chicago. 

5.  ^  Increase  in  pensions  to  higher  officers  of  the  Chicago  police. 

6.  Limitations  of  pension  of  any  officers  of  Chicago  fire  depart- 
ment to  $3,000  per  annum. 

1.     Increase  in  Financial  Support  for  Certain  Funds 

This  increase  in  financial  support  consisted  essentially  in  increas- 
ing both  the  contribution  of  the  employes  and  of  the  cities. 

The  employes'  contributions  were  increased  as  follows :  For  the 
Chicago  Police  Fund  from  two  per  cent  to  two  and  a  half  per  cent  of 
salaries,  with  the  further  provision  that  if  a  participant  retired  before 
attainment  of  age  50  but  after  20  years  of  service,  he  must  pay 
five  per  cent  of  his  salary  from  the  time  of  retirement  until  attainment 
of  age  50;  for  the  Chicago  Firemen's  Fund  from  one  per  cent  to  two 
and  a  half  per  cent  of  salaries  with  a  like  provision  regarding  retirement 
before  age  50  to  that  of  the  Police  Fund ;  for  the  Municipal  Employes' 
Fund  of  Chicago,  from  $2.00  per  month  to  $2.50  per  month. 

The  City  of  Chicago  as  an  employer  increased  the  tax  levy  from 
seven  tenths  to  nine  tenths  of  a  mill  on  the  dollar  for  the  Police  Fund, 
and  from  three  tenths  to  five  tenths  of  a  mill  on  the  dollar  for  the 
Firemen's  Fund,  and  from  an  amount  equal  to  the  amount  deducted 
during  the  previous  year  from  the  salaries  of  employes  to  twice  the 
amount  so  deducted  for  the  Municipal  Employes'  Fund. 

A  tax  of  three  tenths  mill  on  each  dollar  of  taxable  property  in 
the  city,  village,  or  town  concerned  is  to  be  levied  for  a  period  of 
three  years  beginning  in  1918  for  the  Policemen's  Pension  Funds  in 
cities,  villages,  and  towns  of  from  5,000  to  100,000  inhabitants.  For 
the  Firemen's  Funds  in  cities,  villages,  and  towns  of  from  5,000  to 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  225 

200,000  inhabitants,  the  tax  levy  of  three  tenths  mill  on  the  dollar 
provided  in  the  1916  law  was  extended  to  the  years  1918  and  1919. 
There  were  also  a  few  other  minor  changes  of  but  little  significance. 

2.  Modification  Involving  a  Possible  Decrease  in  Financial  Sup- 

port 

The  modification  of  this  character  refers  to  the  change  in  respect 
to  tax  levy  of  three-tenths  mill  for  the  funds  of  firemen  in  cities  of 
from  5000  to  200,000  population.  The  modification  provides  that  the 
tax  levy  may  be  dispensed  with  if  the  sum  in  the  fund  over  and  above 
the  "reserve"  fund  is  sufficient  to  meet  all  demands  of  those  requiring 
payment  from  the  fund.  The  term  "reserve"  is  used  very  loosely  in 
this  provision,  but  it  probably  means,  judging  from  another  provision 
of  the  law,  a  sum  equal  to  $15,000  in  cities,  villages,  or  towns  of 
from  5000  to  25,000  inhabitants,  and  $25,000  in  cities,  villages,  and 
towns  of  from  25,000  to  200,000  inhabitants. 

3.  Fixing  of  a  Minimum  Age  of  Retirement 

The  conditions  for  a  pension  for  a  fireman  or  a  policeman  in 
Chicago  were  changed  so  as  to  prescribe  a  minimum  age  of  fifty  for 
retirement  in  addition  to  twenty  years  of  service.  For  the  reasons 
for  the  requirement  of  a  minimum  age  of  retirement,  see  pages  277-278, 
Report  of  Illinois  Pension  Laws  Commission  of  1916. 

4.  Change  in  Pensions  for  Widows  and  Children 

Under  the  law  in  force  prior  to  July  1,  1917,  the  widow  of  a 
deceased  policeman,  or  if  there  was  no  widow,  the  children  under 
sixteen  years  of  age,  received  the  same  pension  that  the  deceased 
employe  would  have  obtained  if  he  were  living  and  on  pension,  no  dis- 
tinction in  amount  of  pension  being  made  on  the  basis  of  the  size  of  the 
family  of  children.  In  the  revision  of  this  act,  widows  and  children 
are  provided  for  separately.  In  this  it  follows  the  Chicago  Firemen's 
Act,  in  which  separate  provisions  are  made  for  widows  and  children. 

Under  the  acts  as  revised,  the  widow  of  a  policeman  receives 
$50  per  month,  and  the  widow  of  a  fireman  $45  per  month.  If  the 
widow  of  the  deceased  employe  is  living,  there  is  to  be  paid  a  pension 
of  $10  per  month  for  each  child  under  eighteen,  if  such  child  is  attend- 
ing school.  If  the  policeman  leaves  no  widow  surviving  him,  or  if  his 
widow  should  die  before  each  child  arrives  at  the  age  of  eighteen 
years,  then  each  child  under  eighteen  while  attending  school  shall 
receive  a  pension  of  $15  per  month.  If  the  child  ceases  to  attend  school, 
the  pension  is  reduced  $5.00  per  month. 


226  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Another  important  change  made  consists  in  fixing  the  pension  of 
the  widow  of  a  policeman  who  died  before  he  had  twenty  years  of 
service.  Under  the  act  before  it  was  revised,  a  pension  equal  to  one- 
half  the  salary  of  the  policeman  at  the  time  of  death  was  paid  to  the 
widow  provided  the  policeman  had  at  least  ten  years  of  service,  and 
was  married  at  least  two  months  before  his  death.  Under  the  revised 
act  the  pension  of  the  widow  is  fixed  at  $2.50  per  month  for  each 
year  of  service  but  not  to  exceed  half  his  salary. 

5.  Increase  in  Pension  to  Higher  Officers  of  Chicago  Police  De- 

partment 

The  amounts  of  pensions  to  higher  officers  was  increased  from 
half  salary  with  a  maximum  of  $900  a  year  to  amounts  as  follows : 

1.  If  the  officer  was  on  pension  prior  to  July  1,  1917,  and  of  the 
rank  of  captain  or  above,  $1000. 

2.  If  the  officer  entered  on  pension  after  July  1,  1917: 

General  Superintendent '. $1300 

First  Deputy 1150 

Captain 1100 

Lieutenant    . . . 1000 

6.  Limitations  on  Amount  of  Pension  to  Any  Officer  of  the  Chi- 

cago Fire  Department  to  $3,000  per  Year 

The  revision  changed  the  pensions  for  Chicago  firemen  from  half 
salary  to  half  salary  with  a  maximum  of  $3000  per  year.  This  change 
under  present  salary  conditions  would  affect  the  pension  of  only  one 
official  in  the  department. 

EFFECT  OF  THE  ACTS  OF  THE  FIFTIETH  GENERAL 
ASSEMBLY  ON  THE  FINANCIAL  CONDITIONS  OF 
PENSION  FUNDS  FOR  PUBLIC  EMPLOYES 

THE  CHICAGO  POLICE  FUND 

The  valuation  of  this  fund  (page  103,  Report  of  Illinois  Pension 
Laws  Commission,  1916)  as  of  January  1,  1916,  showed  a  deficit  of 
$30,602,879.  The  meaning  of  this  deficit  may  perhaps  be  better  under- 
stood by  saying  that  it  would  have  required  $30,602,879  on  hand  on 
January  1,  1916,  in  addition  to  contributions  expected  of  employ, 
and  other  assets  on  hand,  to  carry  out  the  pension  plans  for  pensioners 
on  the  roll,  and  on  behalf  of  active  employes 'in  service  January  1, 
1916.  Stated  in  another  form,  a  subsidy  of  $30,602,879,  added  to 
assets  and  contributions  of  employes,  would  provide  pensions  pre- 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  227 

scribed  by  law  for  the  pensioners  of  January  1,  1916,  and  for  those 
who  will  become  pensioners  from  the  active  force  of  January  1,  1916. 

The  financial  situation  can  perhaps  be  realized  if  we  assume 
that  $30,602,879  could  be  borrowed  at  4  per  cent  to  provide  the  funds 
that  would  be  required  to  carry  out  the  plans.  It  would  require  $1,224,- 
115  per  annum  to  pay  the  interest  on  the  sum  borrowed.  This  amount 
would  be  needed  annually  in  addition  to  what  would  be  required  on 
account  of  new  entrants  after  January  1,  1916,  to  create  the  adequate 
reserves  on  behalf  of  such  new  entrants.  The  amount  required  to 
create  reserves  on  behalf  of  new  entrants  would  begin  with  a  small 
amount  of  about  $35,000  the  first  year  of  operation,  and  rise  gradually 
to  nearly  $900,000  a  year  when  in  full  operation.  Moreover,  the  fund 
would  continue  to  have  a  deficit  equal  to  the  amount  borrowed. 

The  aim  in  what  follows  is  to  estimate  the  financial  effects  of  the 
revision  of  different  provisions  of  this  act  by  the  Fiftieth  general 
Assembly. 

Increase  in  Financial  Support  Improves  Fund  Somewhat 

The  effect  of  raising  contributions  to  2l/2  per  cent  would  be  to 
improve  the  fund  by  $322,812.  The  nine-tenths  mill  tax-levy  on  the 
dollar  gives  an  income  of  approximately  $900,000  per  year,  or  at  4 
per  cent  a  capitalized  value  of  $22,500,000  if  we  regard  the  $900,000 
as  a  perpetuity.  If,  however,  we  give  credit  for  the  capitalized  value 
of  $900,000  per  year  as  a  perpetuity  we  must  also  hold  as  a  liability 
the  present  value  of  prospective  pensions  to  future  entrants  required 
to  keep  up  the  service.  The  value  of  pensions  to  future  entrants  dis- 
counted to  the  present  time  at  4  per  cent  is  $14,718,154. 

It  should  be  noted  especially  that  the  improvement  in  the  fund  as 
shown  by  the  change  in  the  balance  sheet  is  due  mainly  to  the  fact  that 
the  $900,000  per  year  from  taxation  is  credited  as  a  perpetuity. 

Fixing  of  a  Minimum  Age  of  Retirement  Reduces  Cost 

There  were  on  January  1,  1916,  fifty-three  service  pensioners 
under  age  of  fifty  out  of  a  total  of  555  service  pensioners.  In  the 
service  table  (pages  87-88,  Report  of  1916),  it  is  shown  that  there 
are  3899  pensions  taken  under  age  fifty  out  of  a  total  of  33,357.  It 
is  a  fair  estimate  that  the  present  value  of  the  amount  necessary  to 
keep  up  the  pension  to  employes  under  age  fifty  is  $1,000,000.  This 
estimate  is  not  an  accurate  determination  but  is  near  enough  to  be  used 
in  forming  a  general  notion  of  the  change  in  the  financial  status  of 
the  fund  through  the  introduction  of  a  minmum  age  of  retirement. 


228  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Changes  in  Pensions  of  Widows  and  Children  of  Employes  a  Small 
Item 

The  change  from  half  salary  at  the  time  of  retirement  to  $50  per 
month  would  save  some  money  for  this  fund  if  the  change  applied 
to  the  present  scale  of  salaries.  But  the  law  provides  for  increasing 
to  $50  per  month  the  pensions  of  those  widows  who  were  receiving 
pension  of  less  than  this  amount.  On  the  whole,  with  a  pension  of 
$600  per  year  for  all  widows,  the  expense  of  widows'  pensions  for 
those  who  are  at  present  on  the  pension  roll  will  be  very  little  less 
than  under  the  old  law. 

Furthermore,  the  pension  of  $2.50  per  month  for  each  year  of 
the  deceased  husband's  service  with  a  maximum  of  $50  per  month  is 
not  much  different  in  expense  from  the  pension  of  half  salary  offered 
to  widows  under  the  condition  that  the  husband  must  have  ten  or 
more  years  of  service. 

The  children's  pensions  will  probably  cost  three  or  four  times  as 
much  under  the  new  law  as  under  the  superseded  law,  but  in  any 
case  the  children's  pensions  constitute  a  relatively  small  item.  In  short, 
the  change  in  the  financial  status  of  the  fund  owing  to  changes  in  the 
provisions  for  pensions  to  widows  and  children  will  be  small. 

Increasing  Pensions  to  Higher  Officers  of  the  Chicago  Police  De- 
partment Adds  $300,000  to  the  Deficit. 

The  following  list  indicates  the  number  of  higher  officers  among 
the  present  pensioners  of  the  Chicago  Police  Fund  as  of  August,  1918: 

General  Superintendents 1 

First   Deputies — 

Assistant  Superintendents  (Old  Classification) .  .     2 

Inspectors    (Old  Classification)    4 

Captains    20 

Lieutenants   20 

It  is  possible  to  determine  only  roughly  the  increase  in  the  deficit 
that  this  change  caused,  but  the  present  value  of  the  increase  certainly 
amounts  to  $300,000,  and  probably  to  considerably  more. 

Total  Effect  of  1917  Legislation  on  Police  Fund— Leaves  $21,000,- 
000  Deficit 

If  we  bring  together  the  financial  effects  of  the  various  factors 
treated  above,  giving  credit  for  the  capitalized  values  of  income,  and 
charge  as  a  liability  the  present  value  of  pension  rights,  including  those 
to  future  entrants  required  to  keep  up  the  service,  we  have  a  deficit 
on  January  1,  1918,  of  $21,753,000.  When  we  thus  look  at  the  total 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  229 

effects  of  the  legislation  of  the  Fiftieth  General  Assembly  on  the 
fiancial  condition  of  the  Chicago  Police  Pension  Fund,  we  can  say  that 
the  financial  situation  has  been  slightly  improved  by  the  introduction 
of  a  retirement  age,  by  requiring  increased  contributions,  and  possibly 
very  slightly  by  change  in  widows'  pensions.  It  has  -been  made  worse 
by  the  increase  in  pensions  to  higher  officers.  It  has  also  been  affected 
adversely  by  the  change  in  children's  pensions. 

It  is  a  safe  statement  that  the  condition  of  the  fund  as  judged 
by  the  deficit  on  present  employes  is  not  so  good  as  it  was  two  years 
ago  by  about  $700,000,  if  we  should  credit  the  receipts  for  two  years 
from  the  nine-tenths  mill  tax-levy  instead  of  regarding  the  $900,000 
per  year  as  a  perpetuity,  but  the  condition  is,  of  course,  better  than 
it  would  have  been  had  no  legislation  been  enacted. 
Police  Fund  Condition  Will  Grow  Worse  Unless  Law  Is  Changed 

With  an  annual  income  too  small  to  pay  the  interest  on  the  accrued 
liabilities,  it  is  perfectly  clear  that  the  condition  of  this  fund  will  grow 
worse,  unless  decided  changes  are  made.  On  the  present  basis,  it 
would  require  for  pensions  in  twenty  years  from  now  30  per  cent 
of  the  amount  required  for  salaries.  This  means  that  the  system  will 
fail  unless  there  are  great  increases  in  the  contributions  or  great 
decreases  in  benefits,  or  a  compromise  by  increasing  contributions 
considerably  and  decreasing  benefits  considerably. 

THE  CHICAGO  FIREMEN'S  FUND 

The  valuation  of  this  fund  (page  123,  Report  of  Illinois  Pen- 
sion Laws  Commission,  1916)  as  of  January  1,  1916,  showed  a  deficit 
of  $13,772,011. 

An  explanation  of  the  meaning  of  such  a  deficit  is  given  above 
in  considering  the  effects  of  1917  legislation  on  the  Police  Fund  of 
Chicago. 

The  financial  situation  would  perhaps  be  realized  if  we  assumed 
that  $13,722,011  were  to  be  borrowed  at  4  per  cent  to  carry  out  the 
plans.  It  would  first  of  all  require  $550,880  per  annum  to  pay  the 
interest  on  the  sum  borrowed.  If  we  are  to  put  the  pension  fund  on 
a  reserve  basis,  it  would  require  in  addition  to  this  interest,  the  amount 
necessary  to  create  reserves  on  the  entrants  to  the  service  after  Jan- 
uary 1,  1916.  By  providing  merely  the  funds  to  pay  interest  and  to 
create  reserves  on  new  entrants,  there  would  remain  permanently  the 
deficit  of  $13,772,011.  Moreover,  the  amount  required  annually  to 
provide  reserves  on  new  entrants  would  increase  until  the  entire  service 
consisted  of  new  entrants. 


230  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Effect  of  Increase  in  Financial  Support  Is  Decrease  in  Deficit  of 

Firemen's  Fund 

The  change  from  one  to  two  and  one-half  per  cent  of  salaries 
changes  the  present  value  of  the  contributions  expected  from  present 
employes  as  given  in  the  1916  Report  (page  123),  from  $328,805  to 
$822,012,  or  by  an  amount  equal  to  $493,207.  The  amended  law  pro- 
vides for  a  tax  levy  not  to  exceed  five-tenths  mill  on  each  dollar  of 
taxable  property  in  Chicago.  This  five-tenths  mill  on  each  dollar  will 
provide  about  $500,000  annually  on  the  present  valuation  of  Chicago 
property.  The  present  capitalized  value  of  the  $500,000  at  4  per  cent 
is  $12,500,000.  But  future  entrants  are  involved  and  the  present  value 
of  their  benefits  is  $6,883,962,  to  be  held  as  a  liability. 

Establishing  a  Minimum  Age  for  Retirement  of  Firemen  Yields 
Substantial  Cut  in  Costs 

The  change  from  merely  twenty  years  of  service  as  a  condition 
for  a  pension  to  twenty  years  of  service  and  the  attainment  of  age 
50  improves  somewhat  the  condition  of  the  fund.  It  is  our  purpose 
to  make  an  estimate  of  the  change  this  will  make  in  the  cost  of  pensions 
for  firemen. 

The  effect  will  be  similar  to  that  discussed  under  the  police  fund, 
but  it  will  be  a  little  more  marked,  because  relatively  more  firemen 
than  policemen  have  retired  at  ages  under  fifty. 

There  were  on  January  1,  1916,  twenty-five  service  pensioners 
under  age  fifty  out  of  a  total  of  164  service  pensioners  on  the  roll 
of  the  firemen's  fund.  In  the  service  table  (pages  108-109,  Report  of 
1916),  there  are  6528  pensions  taken  at  ages  under  fifty,  out  of  a 
total  of  32,520  pensions.  The  introduction  of  the  retirement  age  50 
will  probably  reduce  the  cost  of  pensions  to  employes  by  ten  to  fifteen 
per  cent  when  the  system  is  in  full  operation,  but  it  will  not  affect 
widows*  pensions  by  a  significant  amount.  Expressed  in  a  total 
amount,  this  change  will  decrease  the  deficiencies  by  nearly  $500,000. 

Increase  in  Children's  Pensions  Adds  Somewhat  to  Liabilities 

The  children's  pensions  are  changed  from  $8.00  per  month  to 
$10.00  per  month  if  the  mother  is  alive.  This  would  increase  the 
'accrued  liability  shown  on  page  123,  Report  of  1916,  on  account  of 
children's  pensions  by  perhaps  $17,000. 

Legislation  of  1917  Leaves  Chicago  Firemen's  Fund  with  $7,000,000 

Deficit 

When  we  thus  look  at  the  sum  total  of  the  effects  of  the  legisla- 
tion of  the  Fiftieth  General  Assembly  on  the  financial  condition  of 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  231 

the  Firemen's  Pension  Fund  of  Chicago,  we  can  say  that  the  financial 
situation  has  improved  by  the  increased  contributions  of  both  city  and 
employes,  and  by  introducing  a  minimum  age  for  a  pension. 

If  we  bring  together  the  financial  effects  of  the  various  factors 
treated  above,  giving  credit  for  the  capitalized  value  of  income,  and 
charge  as  a  liability  the  present  value  of  the  pension  rights,  including 
those  to  future  entrants  required  to  keep  up  the  service,  we  still  have 
a  deficit  of  about  $7,200,000.  This  deficit  will  increase,  for  there  is 
no  source  of  revenue  to  provide  funds  for  interest. 

Similar  to  the  police  fund,  the  improvement  as  shown  by  the  bal- 
ance sheet  is  due  mainly  to  crediting  receipts  from  taxation  in  perpe- 
tuity, modified  by  the  cost  on  account  of  future  entrants. 

Calls  for  Decided  Changes 

It  is  a  safe  statement,  however,  that  the  deficiency  was  larger  on 
January  1,  1918,  than  two  years  before  by  nearly  $300,000,  if  we 
simply  credit  the  receipts  from  the  five-tenths  mill  tax  lavy  for  two 
years  instead  of  crediting  a  perpetuity  of  $500,000.  Unless  decided 
changes  are  made,  the  deficiency  will  increase  much  in  years  to  come. 

THE  MUNICIPAL  EMPLOYES'  FUND   OF  CHICAGO 

At  the  date  of  the  actuarial  examination  of  the  Chicago  Municipal 
Employes'  Fund,  January  1,  1916,  there  had  been  no  pensions  paid 
from  thi->  fund.  There  having  been  no  experience  as  to  rates  of  retire- 
ment at  various  ages,  it  was  necessary  to  investigate  the  fund  on  the 
basis  of  certain  hypotheses  as  to  the  average  age  of  retirement.  In  fact, 
the  investigation  was  based  on  four  different  hypotheses:  Retirement 
at  age  55,  at  60,  at  65,  and  at  70,  if  the  employe  was  eligible  with  respect 
to  service.  Pensions  have  been  paid  since  July  1,  1916. 

Average  Age  of  Retirement  of  First  326  Annuitants  Is  High 

A  report  on  the  fund  as  of  September  1,  1918,  shows  that  326 
persons  were  granted  pensions  in  the  interval  from  July  1,  1916,  to 
September  1,  1918.  The  average  age  of  retirement  was: 

For  service  pensioners 64.9 

For  disability  pensioners 54.6 

This  average  for  service  retirement  would  not  be  fair  as  an 
average,  however,  to  accept  for  the  fund  in  the  future,  since  many 
of  these  retired  men  would  have  accepted  the  pensions  sooner  if  pen- 
sions could  have  been  obtained  before  July  1,  1916.  That  is  to  say, 
the  average  age  of  retirement  during  the  interval  July  1,  1916,  to 
September  1,  1918,  was  higher  than  the  average  to  be  expected  in  the 
future. 

16 


232  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

It  should  be  stated  here  that  the  disability  benefits  under  this 
fund  are  being  granted  in  cases  of  temporary  disability.  Of  the  326 
beneficiaries,  ninety-two  were  retired  for  disability.  Indeed,  the  dis- 
ability provision  has  proved  much  more  expensive  than  was  contem- 
plated in  the  actuarial  valuation  of  this  fund.  This  is  due  to  both  the 
facts  that  pensions  are  granted  for  temporary  disability  extending 
beyond  sick  leave  and  that  there  is  a  group  of  old  employes  who  have 
not  sufficient  service  to  be  retired  on  service  pensions. 

In  considering  the  effects  of  the  acts  of  the  Fiftieth  General 
Assembly  on  the  financial  condition  of  this  fund,  it  seems  desirable  to 
trace  the  effect  both  when  we  assume  retirement  at  fifty-five  and  at 
age  sixty,  if  the  employes  are  eligible.  With  the  unexpected  increase 
in  cost  of  disability  pensions,  it  seems  clear  that  it  would  be  unsafe 
to  consider  that  sixty-five,  or  a  higher  age,  is  a  proper  age  to  assume 
in  computing  the  financial  obligations  of  the  fund. 

$7,000,000  Deficit  on  the  Hypothesis  of  Retirement  at  Age  55*  When 
the  Employe  Satisfies  the  Service  Requirement 

When  we  consider  new  entrants  to  the  system,  it  turns  out  by 
calculations  based  on  figures  on  page  151  of  the  Report  of  the  Illinois 
Pension  Laws  Commission  of  1916  that  if  the  employes  enter  at  age 
29,  the  funds  created  from  contributions  of  employes  and  those 
of  the  employer  amounting  together  to  $7.50  per  month  per  em- 
ploye would  supply  the  necessary  funds  to  provide  the  pensions.  For 
younger  ages  of  entrance,  more  than  is  necessary  would  be  supplied. 
For  older  ages  of  entrance,  less  than  is  necessary  would  be  supplied. 
When  we  consider  present  employes  under  the  assumption  about  re- 
tirement at  age  55,  and  modify  the  balance  sheet  on  page  159  of  the 
1916  Report,  we  find  that  with  the  increase  in  contributions  of  the  em- 
ploye to  $2.50  per  month  and  with  the  addition  to  assets  of  twice  this 
amount  from  the  employer  on  behalf  of  each  employe,  the  indicated 
deficiency  of  $9,596,090  would  be  reduced  to  about  $7,000,000. 

In  the  experience  examined  the  average  age  of  entrance  was  be- 
tween thirty-two  and  thirty-three,  but  we  may  probably  well  expect 
a  reduction  in  this  age. 

If  the  age  of  entrance  for  new  entrants  were  below  twenty-nine 
years,  the  fund  would  have  some  further  assets,  if  we  include  the 
future  entrants,  but  29  is  too  low  an  average  age  to  assume  for  en- 
trance, and  further  liabilities  would  exist  if  we  should  include  future 
entrants  with  retirements  at  55. 


*The  assumption  regarding  retirement  at  age  55  includes  the  fact  that  those 
not  eligible  to  retire  at  age  55  will  not  retire  until  age  60. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  233 

$3,000,000  Deficit  on  the  Hypothesis  of  Retirement  at  Age  60  When 
the  Employe  Satisfies  Service  Requirements,  and  When  the 
Future  Entrants  are  Included 

To  estimate  the  effect  of  changes  in  legislation  with  retirement  at 
age  sixty,  we  give  attention  to  figures  on  pages  152  and  159  of  the 
1916  Report. 

For  new  entrants  to  the  system,  if  they  enter  at  age  34, 
the  revenue  provided  from  contributions  of  employe  and  employer 
would,  when  added  to  gains  from  withdrawals,  provide  the  necessary 
funds.  There  is  therefore  a  certain  addition  to  assets  to  be  expected 
on  account  of  the  fact  that  future  entrants  will  on  the  average  probably 
enter  considerably  under  age  thirty-four.  In  considering  present  em- 
ployes and  future  entrants  with  an  assumed  age  of  entrance  at  31,  we 
modify  the  balance  sheet  on  page  159  of  the  1916  Report.  We  find  that 
by  the  increase  in  revenue  when  we  take  credit  for  the  value  of  $7.50 
per  month  on  behalf  of  each  employe,  throughout  all  his  remaining 
probable  service,  and  take  credit  for  the  capitalized  value  of  excess  on 
future  entrants,  the  deficiency  is  reduced  to  about  $3,000,000. 

It  should  be  noted  that  above  under  assumption  of  age  55 ;  and,  in 
valuations  of  the  1916  Report,  we  have  not  held  as  a  liability  any 
deficiency  on  future  entrants  necessary  to  keep  up  the  service.  Our 
balance  sheets  dealt  with  present  employes,  and  present  pensioners.  In 
a  way,  consistency  would  demand  if  future  entrants  are  disregarded 
when  they  are  in  the  nature  of  a  liability,  that  they  should  be  disre- 
garded when  they  are  in  the  nature  of  an  asset.  However,  we  hope 
to  avoid  any  incorrect  impression  on  this  point  by  giving  values  both 
when  future  entrants  are  included  and  when  they  are  excluded.  The 
future  entrants  are,  under  our  hypothesis  of  retirement  at  60,  in  the 
nature  of  an  asset  only  because  of  gains  from  withdrawals  and  deaths 
during  the  service  period.  Otherwise  they  would  be  in  the  nature  of  a 
liability. 

Without  the  credit  from  future  entrants,  the  deficit  would  be  in  the 
neighborhood  of  $5,000,000. 

If  we  should  make  the  examination  on  the  basis  of  retirement 
at  65  on  the  part  of  all  eligible  employes,  we  should  find  that  the  funds 
to  be  provided  would  carry  all  the  expected  obligations. 

We  may,  however,  well  recall  that  the  disability  pensions  are  being 
given  in  cases  of  temporary  disability,  and  will  cost  more  than  has 
been  anticipated  in  the  actuarial  valuation.  Indeed,  there  is  no  rea- 
sonably accurate  way  of  determining  at  present  the  cost  of  such  tem- 
porary disability. 


234  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

More  Legislation  Needed  for  Permanence  of  Municipal  Fund 

The  financial  provisions  under  the  amended  law  are  still  inadequate 
to  put  this  fund  permanently  on  a  sound  financial  basis,  unless  the 
retirement  age  were  advanced  to  about  sixty-five  years,  and  the"  dis- 
ability benefits  were  confined  to  cases  of  what  is  adjudged  permanent 
disability. 

FUNDS   OF  POLICEMEN  IN  CITIES  OF  FROM   5,000  TO 
100,000  INHABITANTS 

The  tax  levy  of  three-tenths  mill  on  each  dollar  of  taxable  prop- 
erty was  made  an  important  source  of  revenue.  Since  these  funds 
taken  separately  involve  such  small  numbers  that  they  cannot  be 
treated  as  actuarially  sound,  we  cannot  say  to  what  extent  this  tax 
will  improve  the  condition  of  such  a  small  fund.  When  a  particular 
small  fund  happens  to  have  no  pensioners,  it  seems  to  be  getting  along 
well,  but  the  day  is  almost  sure  to  come  when  such  a  small  fund  will 
be  carrying  so  much  more  than  an  average  burden  that  it  will  be  unable 
to  pay  the  pensions.  It  is  simply  impossible  to  operate  a  sound  pen- 
sion system  with  as  small  a  group  of  men  as  the  policemen  or  firemen 
of  a  small  city. 

FUNDS  OF  FIREMEN  IN  CITIES  OF  FROM  5,000  TO  200,- 
000  INHABITANTS 

The  modification  that  the  tax  levy  of  three-tenths  mill  continued 
for  two  years  1918  and  1919  may  be  dispensed  with  if  a  certain  amount 
is  in  the  fund  was  made  without  any  real  knowledge  as  to  whether  the 
amount  is  sufficient. 

FUNDS  OF  PARK  POLICE 

The  contributions  were  increased  from  two  to  two  and  one-half 
per  cent  of  salaries.  This  change  is  the  same  as  that  for  Chicago  city 
policemen  with  respect  to  contributions. 

REMAINING  FUNDS 

The  legislation  was  not  such  as  to  change  materially  the  financial 
condition  as  presented  in  the  Report  of  the  Illinois  Pension  Laws 
Commission  of  1916. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


235 


CHAPTER  XIV 


ILLINOIS  STATE  TEACHERS'  PENSION  AND 
RETIREMENT  SYSTEM 


Group  of  Teachers  Involved — 26,000  Outside  of  Chicago  and  Peoria 

All  persons  employed  to  teach  in  the  public  schools  of  the  state 
outside  Chicago  and  Peoria  may  participate  in  this  system.  The 
teachers  employed  for  the  first  time  after  July  1,  1915,  are  required 
to  participate.  Those  previously  employed  have  the  option  of 
participation. 

If  all  the  teachers  should  elect  to  participate,  the  system  would 
involve  about  26,000  active  teachers,  and  the  corresponding  pensioners. 

The  law  has  been  in  force  since  July  1,  1915.  In  July,  1918,  there 
were  582  persons  retired  on  full  annuities  of  $400  each. 

The  average  age  of  retirement  was  58.81  years. 

An  annuity  of  $400  per  year  to  a  man  now  of  age  58.81,  payable 
in  monthly  installments,  has  a  present  value  of  $4,203  based  on  the 
American  Experience  Table  of  Mortality  and  4  per  cent  interest. 

The  average  years  of  service  of  the  retired  teachers  was  at  least 
29.9  years.  We  say  "at  least"  because  some  teachers  probably  reported 
only  sufficient  experience  to  fully  satisfy  the  conditions  for  the  pension. 
Benefits  Include  Retirement  and  Disability  Annuities 

To  SERVICE  PENSIONERS — Annuity  of  $400  per  annum  is  paid  to 
a  teacher  who  retires  after  the  attainment  of  age  fifty,  having  served 
in  the  public  schools  of  the  Unite^  States  for  at  least  twenty-five 
years,  the  last  fifteen  of  which  have  been  spent  in  the  public  schools 
of  Illinois,  and  provided  the  teacher  has  paid  the  sum  of  $400  into 
the  fund. 

To  DISABILITY  PENSIONERS — Annuity  of  $16.00  per  annum  for 
each  year  of  service,  not  to  exceed  $400  per  annum,  is  paid  to  one 
who  retires  on  account  of  disability,  provided  the  person  has  been  in 
service  in  the  public  schools  of  the  United  States  for  fifteen  years,  the 
last  nine  of  which  have  been  spent  in  the  public  schools  of  Illinois, 
and  provided  also  that  the  sum  of  $400  has  been  paid  into  the  fund  by 
the  teacher. 


236  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Contributions  Both  from  the  Teacher  and  the  Common  School  Fund 
FROM  THE  TEACHER — Those  who  have  taught  ten  or  fewer  years 
contribute  currently  $5.00  per  year.  Those  who  have  taught  more  than 
ten  but  not  more  than  fifteen  years  contribute  currently  $10.00  per 
year.  Those  who  have  taught  more  than  fifteen  years  contribute  $30.00 
per  year. 

FROM  THE  STATE — From  the  common  school  fund  an  amount 
sufficient  to  meet  all  the  demands  on  this  pension  and  retirement  fund, 
which  amount,  until  otherwise  provided  by  law,  is  fixed  at  one-tenth 
mill  upon  each  dollar  of  the  assessed  valuation  of  all  taxable  property 
of  the  state,  exclusive  of  cities  and  school  districts  not  coming  under 
the  system. 

CONTRAST  BETWEEN  THE  PENSION  SYSTEM  FOR  ILLI- 
NOIS TEACHERS  AND  THE  SOUND  PENSION  SYS- 
TEMS FOR  TEACHERS  IN  CERTAIN  OTHER 
STATES 

Beginning  with  the  Massachusetts  law  of  1913,  there  has  been 
in  this  country  a  tendency  towards  financially  sound  pension  systems 
for  teachers.  This  tendency  showed  itself  most  decidedly  in  the  pen- 
sion laws  recently  enacted  for  teachers  in  the  City  of  New  York,  and 
for  the  entire  State  of  Pennsylvania.  (See  Chapter  X,  this  Report.) 

It  is  our  purpose  to  point  out  a  few  of  the  striking  contrasts 
between  these  sound  pension  systems  for  teachers  and  the  correspond- 
ing system  in  operation  in  Illinois.  Since  the  law  for  teachers'  pensions 
in  Pennsylvania  is  of  state-wide  application,  our  purpose  will  be  well 
served  by  taking  this  law  as  an  example  for  a  contrast  with  the  law  in 
Illinois  that  may  also  be  said  to  be  of  state-wide  application,  since  it 
involves  the  entire  state,  with  the  exception  of  Chicago  and  Peoria, 
and  since  these  cities  have  in  operation  pension  systems  almost  identical 
with  the  state-wide  system. 

1.  Contrast  with  Respect  to  the  General  Plan  of  Financing  the 
System 

On  the  one  hand,  the  Illinois  system  operates  with  little  or  no 
regard  to  future  costs.  The  cost  will  gradually  increase  with  the  pres- 
ent size  of  the  teaching  force  until  the  cost  will  be  between  seven  and 
twelve  per  cent  of  salaries.  (Report  of  the  Illinois  Pension  Laws 
Commission  of  1916,  page  167.) 

On  the  other  hand,  the  Pennsylvania  system  operates  in  such  a 
way  that  the  average  contribution  per  member  of  the  teaching  force 
by  teacher  and  public  will  not  need  to  be  increased  as  time  goes  on. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


237 


The  Pennsylvania  system  is  a  scientific  reserve  system,  while  the 
Illinois  system  is  an  unscientific  system  that  is  likely  to  operate  on 
practically  a  cash  disbursement  basis. 

Under  the  Pennsylvania  system,  the  equities  of  individual  teachers 
are  protected  by  holding  the  reserves  that  stand  to  the  credit  of  indi- 
viduals as  liabilities  of  the  fund,  and  by  providing  the  corresponding 
assets. 

Under  the  Illinois  system  accounts  are  kept  with  individuals  show- 
ing merely  their  own  contributions,  but  not  showing  the  contributions 
of  the  public  on  behalf  of  individuals.  Furthermore,  the  credits  to 
individuals  are  not  treated  as  .a  liability  of  the  fund. 

Under  the  Pennsylvania  system,  when  the  employe  withdraws 
from  the  service,  without  a  pension,  he  receives  all  his  own  contribu- 
tions with  compound  interest  at  4  per  cent,  while  under  the  Illinois 
system,  the  withdrawing  employe  receives  one-half  of  the  sum  con- 
tributed, if  the  contributor  ceases  to  teach  before  serving  fifteen  years, 
but  he  receives  no  refund  if  he  withdraws  after  giving  more  than 
fifteen  years  of  service.  The  Pennsylvania  law  protects  individual 
equities  in  a  fund  set  aside  for  pension  purposes,  whereas  the  Illinois 
law  provides  but  slight  protection  against  losing  what  the  teacher 
contributes. 

2.  Contrast  with  Respect  to  Conditions  as  to  Ages  and  Service  for 

Retirement  on  Pension 

Under  the  Illinois  law,  any  teacher  may  receive  a  pension  who 
has  taught  twenty-five  years,  and  is  at  least  50  years  old. 

Under  the  Pennsylvania  law,  the  teacher  must  be  at  least  62 
years  old. 

This  difference  in  ages  of  retirement  would  make  an  immense 
difference  in  the  costs  of  two  systems  that  were  otherwise  alike. 
Furthermore,  a  difference  in  age  so  marked  as  that  between  fifty  and 
sixty-two  years  seems  to  require  a  different  basis  for  the  justification 
of  the  pension  payments.  In  case  of  retirements  of  healthy  men  at 
50,  it  can  hardly  be  maintained  that  a  life  work  has  been  given  to 
the  teaching  service,  and  that  a  pension  should  be  paid  on  that  ground. 
In  New  York,  the  minimum  age  of  retirement  6f  teachers  on  pensions 
is  65  years — somewhat  higher  than  the  age  in  Pennsylvania,  but  it 
is  provided  in  the  case  of  35  years  of  service  that  the  teacher  may 
be  retired  for  the  good  of  the  service  before  the  attainment  of  age  65. 

3.  Contrast  with  Respect  to  Amount  of  Pension 

Under  the  Illinois  law,  the  pension  is  $400  per  year,  regardless 
of  the  salary. 


238  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

In  Pennsylvania,  the  aim  is  to  provide  a  pension  of  one-half  the 
average  salary  during  the  last  ten  years  of  service.  More  precisely, 
however,  the  retirement  annuity  for  a  Pennsylvania  teacher  is  the 
annuity  that  can  be  provided  with  accumulated  funds  from  the  contri- 
butions of  employe  and  employer,  known  in  advance  to  be  just  sufficient 
to  provide  a  total  benefit  of  one-half  salary  per  year,  if  the  teacher 
was  advanced  in  salary  in  conformity  to  an  average  salary  scale. 
4.  Contrast  with  Respect  to  Contributions 

Under  the  Illinois  system,  the  contributions  of  the  teacher  are 
$5.00  per  year  for  the  first  ten  years  of  service,  $10.00  per  year 
for  the  next  five  years,  and  $30.00  per  year  thereafter. 

Under  the  Pennsylvania  system,  the  teacher  is  to  contribute  by 
deductions  from  salary  one-half  the  funds  required  to  pay  the  retire- 
ment annuities.  The  amount  of  contributions  takes  the  form  of  a 
percentage  of  salary.  Taken  as  a  whole,  much  larger  contributions 
are  required  of  the  teacher  in  Pennsylvania  than  in  Illinois,  but  the 
teacher  of  Pennsylvania  is  thoroughly  protected  against  losing  what 
he  puts  into  the  fund  in  case  of  withdrawal  from  the  service. 

The  striking  difference  between  the  systems  is  that  the  contribu- 
tions of  employe  and  public  made  by  or  on  behalf  of  teachers  in 
Pennsylvania  are  known  to  be  adequate  to  provide  the  benefits,  while 
in  Illinois  it  will  require  large  increases  in  the  appropriations  from  the 
public  to  carry  out  the  system,  and  no  one  can  know  very  accurately 
how  much  will  be  required,  because  of  the  uncertainty  about  the  rate 
of  withdrawals  from  the  teaching  service. 

SUMMARY   OF  CRITICISMS  —  RETIREMENT  AGE  LOW, 
FINANCING  INADEQUATE 

Taken  as  a  whole,  this  pension  system  offers  a  pension  at  an 
unnecessarily  early  age  and  of  a  uniform  amount  to  a  very  hetero- 
geneous group  with  respect  to  living  expenses.  The  amount  of  the 
pension  being  uniform,  it  bears  no  relation  to  the  particular  needs  of 
the  individual  or  to  the  value  of  the  service  of  the  individual. 

The  greatest  financial  defect  of  the  system  lies  in  the  fact  that 
entirely  inadequate  contributions  and  appropriations  are  being  made 
to  support  the  system.  This  much  can  be  said  safely  although  no  very 
accurate  determination  can  be  made  of  the  future  cost  on  account  of 
the  fact  that  rates  of  withdrawal  based  on  past  experience  are  not 
likely  to  be  a  safe  guide  for  the  future. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  239 


CHAPTER  XV 


INDUSTRIAL   AND    INSTITUTIONAL   PENSION 

SYSTEMS 


Many  Retirement  Funds  Established  by  Railroad,  Manufacturing, 
Banking,  Mercantile  and  Telephone  Companies,  Colleges  and 
Churches 

Within  the  past  twenty  years  there  has  been  a  marked  develop- 
ment of  pension  systems  for  employes  of  business  corporations,  for 
teachers  in  colleges  and  universities,  and  for  the  clergy  in  various 
church  organizations.  The  development  of  these  pension  systems 
has  no  doubt  had  some  influence  on  the  development  of  pension  sys- 
tems for  public  employes,  and  at  least  in  this  respect,  becomes  part 
of  our  problem. 

It  is  our  purpose  here  to  give  a  general  notion  of  the  develop- 
ment of  pension  systems  in  the  United  States  outside  the  field  of 
state  and  municipal  employment  and  to  indicate  some  of  the  important 
features  of  the  systems  that  are  in  operation. 

State  Regulation  Is  Proposed 

As  these  systems  are  in  no  case  subject  to  state  regulation,  we 
may  well  consider  the  question  of  the  desirability  of  state  regulation 
of  these  pension  systems  and  the  purpose  that  proper  regulation  would 
serve. 

While  the  great  variations  in  the  provisions  of  the  industrial  and 
institutional  pension  plans  make  it  difficult  to  characterize  them  as  a 
class,  it  appears  that  the  majority  of  such  plans  are  managed  by  the 
employer  and  are  maintained  without  contributions  from  the  employes. 
There  are  a  few  notable  exceptions  to  this  rule  as  indicated  below. 
There  is  enough  in  common  among  the  systems  for  the  railway  em- 
ployes to  facilitate  their  discussion  as  a  class.  Similarly,  there  is 
enough  in  common  among  the  systems  for  a  number  of  manufacturing 
companies  and  banking  institutions  to  make  classes  of  them.  Systems 
for  college  teachers  may  conveniently  be  discussed  together,  and  those 
for  the  clergy  very  naturally  form  a  class. 


240  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

1.     RAILROAD  PENSION  SYSTEMS 

At  least  twenty-five  railroad  systems,  and  more  when  we  count 
inter-urban  systems,  of  the  United  States,  maintain  pensfon  systems 
for  their  employes. 

The  oldest  of  these,  so  far  as  we  have  been  able  to  learn,  was 
established  in  1889  by  the  Baltimore  and  Ohio  Railroad  Company. 
In  Document  No.  427,  United  States  Senate,  61st  Congress  2nd  Ses- 
sion, a  report  is  made  on  the  pension  plans  of  twenty-two  railroad 
systems.  Several  additional  systems  have  adopted  pension  plans  later 
than  this  report. 

AMOUNT  OF  PENSION — The  usual  amount  of  the  retirement  an- 
nuity for  railroad  employes  is  1  per  cent  of  average  pay  for  the  ten 
years  preceding  retirement  multiplied  by  the  number  of  years  of  service. 

To  illustrate,  if  an  employe  received  during  his  last  ten  years 
of  service  an  average  salary  of  $1500  per  year,  and  gave  in  all  30 
years  of  service  before  retirement  age,  his  pension  would  be  30  per 
cent  of  $1500  which  is  $450  per  year. 

The  Sante  Fe  varies  this  amount  by  providing  that  for  each  year 
of  service,  the  pension  shall  be  one  and  one-fourth  per  cent  of  the 
highest  average  monthly  pay,  up  to  $50.00,  during  any  consecutive 
ten  years  of  service,  and  in  addition  three-fourths  per  cent  of  any 
excess  of  such  monthly  pay  over  $50.00. 

The  Twin  City  Rapid  Transit  Company  of  Minneapolis  and  St. 
Paul  offers  2  per  cent  of  average  salary  of  the  last  ten  years  of  ser- 
vice for  each  year  of  service,  with  a  maximum  of  $60.00  per  month 
if  retirement  takes  place  at  age  65,  and  $75.00  if  retirement  takes 
place  at  age  70. 

Trainmen  May  Retire  on  Pension  at  Age  65 

AGE  OF  RETIREMENT — The  most  common  age  for  service  retire- 
ment of  railroad  employes  is  70,  but  for  certain  classes  of  work,  such 
as  that  of  trainmen,  -it  is  provided  that  they  may  retire  on  pension  at 
age  65  if  they  so  elect.  There  are  also  a  few  cases  of  retirement  at 
age  65  for  all  employes  of  a  system,  and  one  minor  case  in  which  pen- 
sions are  offered  at  60. 

CONTRIBUTIONS — No  contributions  are  made  by  employes. 

MANAGEMENT — The  pension  systems  are  managed  entirely  by  the 
employer,  so  far  as  we  have  been  able  to  learn,  except  in  the  case  of 
the  Twin  City  Rapid  Transit  Company  of  Minneapolis  and  St.  Paul. 
In  this  case  the  pension  board  consists  of  seven  members,  two  of  whom 
are  employes  appointed  by  the  president  of  the  company. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  241 

The  employers  in  nearly  every  case  reserve  the  right  to  make 
such  change  in  the  plans  as  experience  demands  or  as  they  see  fit  to 
make. 

2.     PENSION  SYSTEMS  OF  MANUFACTURING  COMPAN- 
IES 

In  order  to  test  the  extent  of  pension  systems  among  industrial 
concerns  in  Illinois,  the  Commission  circularized  the  1600  members 
of  the  Illinois  Manufacturers  Association  by  the  use  of  their  mailing 
list  secured  through  the  courtesy  of  Mr.  John  M.  Glenn,  the  Secretary 
of  the  Association. 

The  nature  of  the  information  requested  in  the  circular  letter  will 
be  clear  from  the  following  quotation  from  the  letter: 

"We  send  this  letter  to  ask:  Does  your  concern  have  a  pension 
system  for  the  retirement  of  employes  when  they  lose  their  efficiency 
on  account  of  old  age? 

"Besides  getting  an  answer  to  this  question,  the  Commission,  in 
furtherance  of  its  work,  desires  also  to  learn  the  details  of  the  pro- 
visions of  the  pension  systems  established  voluntarily  by  private  em- 
ployers. If  your  answer  to  the  above  question  is  in  the  affirmative,  and 
you  have  a  description  of  your  pension  system  in  a  booklet  or  other 
printed  form,  kindly  supply  us  with  two  copies  of  the  same." 

Typical  Industrial  Concerns  Having  Pension  Funds 

Literature  relating  to  pension  plans,  insurance  systems,  employers' 
savings  and  profit  sharing  plans  was  received  from  the  following  con- 
cerns and  from  a  few  others  mentioned  elsewhere  under  mercantile 
concerns  and  under  banks : 

American  Bridge  Company ;  American  District  Telegraph  Co. ; 
American  Steel  and  Wire  Co. ;  Armour  Grain  Co. ;  Borden's  Condensed 
Milk  Co. ;  Chicago  Telephone  Co. ;  Commonwealth  Edison  Co. ;  Deere 
&  Co.  (same  plans  apply  to  John  Deere  Wagon  Works,  Deere  &  Man- 
sur  Works,  John  Deere  Plow  Works,  Union  Malleable  Iron  Works, 
John  Deere  Harvester  Works,  and  Marseilles  Works)  ;  Elgin  Na- 
tional Watch  Co. ;  Fairbanks,  Morse  &  Co. ;  Homestake  Mining  Co. ; 
Ilg.  Electric  Ventilating  Co. ;  General  Electric  Co. ;  Illinois  Mainten- 
ance Co. ;  Moline  Plow  Co. ;  Montgomery  Ward  &  Co. ;  Omaha  Pack- 
ing Co. ;  Otis  Elevator  Co. ;  Phoenix  Horseshoe  Co. ;  Public  Service 
Co.  of  Northern  Illinois ;  Simonds  Manufacturing  Co. ;  Swift  &  Co. ; 
Sears,  Roebuck  &  Co. ;  Sullivan  Machinery  Co. ;  The  Whitman  and 
Barnes  Mfg.  Co. ;  The  Peoples  Gas,  Light  &  Coke  Co. ;  The  Rudolph 
Wurlitzer  Co. ;  T.  M.  Sinclair  &  Co.  Ltd. ;  The  Mechanical  Rubber 


242  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Co. ;  The  Adams  and  Westlake  Co. ;  Illinois  Steel  Co.  (United  States 
Steel  and  Carnegie  Pension  Fund)  ;  Universal  Portland  Cement  Co.; 
Western  Electric  Co. ;  Wilson  &  Co. 

We  had  previous  to  sending  this  circular  letter  obtained  informa- 
tion as  to  pension  systems  of  Armour  &  Co. ;  Crane  Co. ;  International 
Harvester  Co. ;  Morris  &  Co. ;  The  Pullman  Co. ;  Wells  Fargo  Ex- 
press Co.  (The  American  Railway  Express  Co)  ;  and  Western  Elec- 
tric Co. 
Manufacturers  Send  Pamphlets  Describing  Systems 

The  literature  of  a  given  concern  furnished  us  consists,  in  gen- 
eral, of  pamphlets  describing  the  pension  system,  or  the  general  plans 
for  the  welfare  of  employes,  including  a  pension  system. 

These  pension  systems  present  such  a  variety  of  provisions  that 
it  is  very  difficult  to  characterize  them  so  as  to  give  a  fair  notion  of 
the  plans. 

All  told  we  received  627  replies  to  letters  sent  to  1115  manufac- 
turers including  both  those  in  Chicago  and  those  in  the  other  manu- 
facturing centers  of  Illinois.  Of  those  replying  39  have  pension  sys- 
tems, 88  have  insurance  sickness  and  other  benefit  plans,  but  not 
pension  funds,  and  500  have  no  pension  systems. 

It  should  be  made  clear  that  we  used  the  entire  mailing  list  of 
the  Illinois  Manufactuers  Association  and  thus  made  inquiry  of  both 
large  and  small  concerns. 

Relate  Amount  of  Pension  to  Amount  of  Salary 

AMOUNT  OF  PENSIONS — The  most  common  amount  of  pension  is 
the  same  as  that  offered  to  railroad  employes — 1  per  cent  of  a  certain 
average  salary  for  each  year  of  service.  The  average  salary  of  which 
1  per  cent  is  taken  is  usually  the  average  of  the  last  ten  years  of 
service,  but  in  a  few  cases  it  is  the  average  for  the  ten  years  during 
which  the  employe  received  his  highest  salary. 

There  are,  however,  a  number  of  concerns  in  the  above  group 
which  pay  ll/2  per  cent  of  salary,  and  a  few  pay  2  per  cent,  and  two 
packing  companies  pay  2l/2  per  cent  of  a  certain  average  salary  for 
each  year  of  service,  but  there  are  in  these  cases  limitations  in  the 
size  of  the  pension.  There  are  also  a  few  cases  of  retiremnt  on  one- 
half  the  average  annual  salary  of  a  certain  period  near  the  end  of 
service. 

AGE  OF  RETIREMENT — The  ages  of  retirement  vary  from  60  to  70 
years  for  male  employes  when  retirement  is  on  request.  A  few  com- 
panies make  55  the  age  of  retirement  when  the  retirement  board 
approves. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  243 

It  is  interesting  that  a  number  of  these  companies  name  an  age 
of  retirement  for  women  from  five  to  ten  years  lower  than  that  for 
men,  although  it  is  pretty  well  established  that  the  expectation  of  life 
of  women  of  age  55  is  greater  than  the  expectation  of  life  of  men  of 
the  same  age. 

CONTRIBUTIONS  OF  EMPLOYES — In  the  majority  of  cases  no  con- 
tributions are  made  by  employes.  There  are,  however,  a  number  of 
prominent  instances  in  which  such  contributions  are  made.  Thus, 
under  the  Armour  &  Company  System,  Morris  &  Company  System, 
the  Wilson  Company  System,  and  the  T.  M.  Sinclair  &  Company  Sys- 
tem, the  employes  contribute  3  per  cent  of  salaries  toward  pensions. 
Similarly,  in  the  Fairbanks-Morse  &  Company  System  employes  con- 
tribute 3  per  cent  of  salaries.  Under  the  Elgin  National  Watch  Com- 
pany's Pension  Fund,  the  employes  contribute  2  per  cent  of  their 
salaries. 

PENSIONS  NOT  AS  A  RULE  GUARANTEED — In  a  few  cases  it  is 
provided  that  the  company  may  terminate  the  pension  fund  at  any 
time,  but  that  the  annuities  already  entered  upon  shall  not  be  discon- 
tinued. 

Specify  No  Contractual  Right  to  Pension  Exists 

In  many  cases  there  are  explicit  statements  that  no  contractual 
right  to  a  pension  exists.  In  one  prominent  company,  it  is  provided 
that  if  in  twelve  consecutive  months  the  company's  disbursements  for 
service  annuities  shall  exceed  1  per  cent  of  the  gross  income  of  the 
company,  or  such  other  maximum  as  may  from  time  to  time  be  fixed 
by  the  board  of  directors,  a  new  rate  may  be  established  reducing  pro- 
portionately all  annuities. 

MANAGEMENT — The  management  is,  in  general,  in  the  hands  of 
a  board  of  trustees  appointed  by  the  company.  There  are,  however, 
exceptions  to  this.  Thus,  in  the  case,  of  Morris  &  Company  the  admin- 
istration is  vested  in  a  committee  of  five  of  whom  three  are  selected 
by  employes. 

SERVICE  REQUIREMENT — Nearly  all  industrial  pension  systems 
have  a  service  requirement  in  the  form  of  a  minimum  number  of  years 
of  service  in  addition  to  the  attainment  of  a  certain  age  for  retirement. 

3.     PENSION  SYSTEMS  OF  BANKING  INSTITUTIONS 

The  following  list  of  banks  with  pension  systems  will  serve  to 
illustrate  the  type  of  banking  institutions  that  have  pension  systems  in 
operation : 


244  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

First  National  Bank  of  Chicago;  Continental  and  Commercial 
National  Bank  of  Chicago;  First  National  Bank  of  the  City  of  New 
York;  First  National  Bank  of  Detroit;  Chicago  Savings  Bank  and 
Trust  Company;  Central  Trust  Company  of  Illinois;  The  Northern 
Trust  Company  of  Chicago ;  Guarantee  Trust  Company  of  New  York ; 
National  Bank  of  Commerce  in  New  York;  National  City  Bank  of 
New  York;  Bankers  Trust  Company  of  New  York. 

AMOUNT  OF  PENSIONS — It  is  characteristic  of  these  systems  that 
they  provide  a  pension  of  2  per  cent  of  a  final  salary  or  of  an  average 
salary  for  a  period,  for  each  year  of  service,  with  a  limitation  that 
the  amount  of  pension  shall  not  exceed  a  certain  per  cent  of  average 
salary,  which  per  cent  is  generally  70  but  in  one  case  it  is  60. 

To  illustrate,  if  an  employe  had  at  retirement  age  served  25  years, 
he  would  be  granted  a  pension  of  25  times  2  per  cent  of  salary.  This 
would  simply  give  50  per  cent  of  salary. 

There  is  usually  in  the  pension  systems  of  banks  the  provision 
that  the  pension  is  not  payable  for  a  greater  number  of  years  than 
the  number  of  years  of  service  of  the  employe. 

AGE  OF  RETIREMENT — The  minimum  age  for  retirement  varies 
from  60  to  65  years. 

MANAGEMENT — The  management  is  in  each  case  vested  in  trus- 
tees appointed  by  the  bank. 

CONTRIBVTIONS    BY    EMPLOYER    AND    EMPLOYES In    all    CaSCS    the 

banks  make  contributions  to  the  funds.  The  five  banks  first  named 
above  require  contributions  of  3  per  cent  of  salaries  from  each  em- 
ploye. 

Take  Entrance  Ages  of  Contributing  Employes  Into  Account 

The  Central  Trust  Company  of  Illinois  has  a  more  equitable 
provision  by  requiring  that  the  employe  contribute  to  the  fund  accord- 
ing to  his  age  on  the  date  of  his  first  contribution  in  proportion  to 
the  actual  cost  of  the  pension  to  be  provided  at  age  65.  These  con- 
tributions are  on  an  actuarial  basis.  It  is  provided,  however,  that  if 
an  employe's  contributions  under  this  plan  should  exceed  3  per  cent 
of  his  salary,  he  shall  have  the  option  to  pay  3  per  cent  of  his  salary 
instead  of  the  percentage  required  to  provide  a  full  pension,  in  which 
case  benefits  under  this  fund  shall  be  reduced  proportionately. 

The  Northern  Trust  Company  takes  account  of  employes'  ages  at 
entrance.  It  requires  contributions  of  3  per  cent  of  salaries  from  all 
employes,  and  in  addition  y2  per  cent  from  an  employe  entering  at 
age  under  36  for  a  time  equal  to  twice  the  number  of  years  his  age 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  245 

at  entrance  exceeds  25,  and  1  per  cent  from  an  employe  entering  at 
age  over  36  for  a  time  equal  to  the  number  of  years  his  age  at  entrance 
exceeds  25.  Under  the  system  of  the  remaining  four  banks,  no  con- 
tributions are  required  of  employes. 

REFUNDS — In  each  case  there  is  a  refund  of  contributions  upon 
withdrawal  from  service.  The  refund  consists  of  contributions  with 
interest  in  the  case  of  three  of  the  five  banks  named  above.  The  re- 
maining two  return  contributions  Without  interest  in  cases  of  with- 
drawal or  dismissal,  but  with  interest  in  case  of  death. 

4.     PENSION    SYSTEMS    OF    MERCANTILE    ESTABLISH- 
MENTS 

Although  the  establishment  of  pension  systems  by  mercantile 
establishments  seems  to  be  somewhat  unusual,  it  may  be  of  interest  to 
report  briefly  on  the  plans  of  Butler  Brothers;  Sprague,  Warner  & 
Company;  Montgomery  Ward  &  Company;  and  Sears,  Roebuck  & 
Company. 

In  the  first  two  named  an  employe  of  the  age  of  60  with  20  years 
of  service  becomes  eligible  for  a  pension  of  1  per  cent  of  average 
salary  of  the  last  five  years  before  retirement  for  each  year  of  service. 
In  the  system  of  Butler  Brothers  no  pension  shall  exceed  $1,000. 
When  a  pension  to  which  a  retired  employe  would  be  entitled  is  less 
than  $300  per  annum,  the  directors  at  their  discretion,  may  increase 
it  to  $300.  Butler  Brothers  reserve  the  right  to  discontinue  the  pen- 
sion fund  at  any  time  with  the  understanding  that  those  on  the  pension 
roll  shall  not  be  deprived  of  their  pensions.  Under  the  system  of 
Sprague,  Warner  &  Company  the  annual  pension  is  one-half  of  the 
average  annual  salary  for  the  last  five  years  of  service  before  retire- 
ment. A  sort  of  bonus  is  offered  for  longer  service  than  twenty  years. 
For  a  service  from  25  to  29  years,  there  is  a  10  per  cent  increase 
in  pension.  For  a  service  of  thirty^  or  more  years,  there  is  a  20  per 
cent  increase.  No  contributions  are  required  of  employes,  and  the 
companies  are  the  managers  of  the  systems. 

Mail  Order  Houses  Have  Unique  Provisions 

Montgomery  Ward  &  Company  provides  for  retirement  of  em- 
ployes at  age  70  and  obligates  the  company  to  pay  the  pension  when  en- 
tered upon  under  all  contingencies.  The  minimum  pension  is  25  per 
cent  of  the  last  wages  received  by  the  employe;  and,  for  each  year  of 
service  beyond  twenty  years,  there  is  added  1  per  cent  of  his.  wages,  but 
no  pension  is  to  exceed  50  per  cent  of  last  wages,  nor  shall  it  exceed 
$1,500.  It  is  explicitly  stated  that  no  employe  has  any  vested  right 


246  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

in  a  pension  until  he  shall  have  been  awarded  the  same.  This  pension 
plan  is  part  of  the  insurance  division  of  the  company. 

The  pension  system  of  Sears,  Roebuck  &  Company  is  called  the 
"Employes'  Savings  and  Profit  Sharing  Pension  Fund."  This  is  a 
very  interesting  plan  operated  on  a  voluntary  basis.  The  company 
contributes  5  per  cent  of  its  net  earnings  to  the  purpose.  The  employe 
contributes  5  per  cent  of  salary  but  not  more  than  $150.00  per  year. 
The  Company's  contributions  are.  pro-rated  annually  to  the  credit  of 
individual  employes  in  proportion  to  the  amount  each  has  contributed. 

With  respect  to  refunds,  an  employe  withdrawing  with  less  than 
ten  years  of  service  receives  his  own  contributions  with  interest  at  5 
per  cent.  One  of  ten  or  more  years  of  service  is  paid  upon  withdrawal 
also  the  employer's  contributions.  This  is  a  case  of  a  subsidized  savings 
scheme.  The  funds  may  be  left  to  provide  an  annuity  or  they  may  be 
withdrawn.  * 

5.  PENSION    SYSTEMS    OF   TELEPHONE   AND    TELE- 

GRAPH COMPANIES 

The  American  Telephone  and  Telegraph  Company  and  Associated 
and  Allied  Companies  established  a  pension  system  in  1913  for  their 
175,000  employes  by  an  initial  appropriation  of  $8,855,000.  At  the 
end  of  each  year  appropriations  are  to  be  made  to  restore  the  fund 
to  its  original  amount  subject  to  a  limit  of  2  per  cent  of  pay-roll  on  all 
companies  except  the  American  Telephone  and  Telegraph  Company, 
where  the  limit  is  to  be  $500,000. 

The  Western  Union  Telegraph  Company  has  a  very  similar  sys- 
tem with  an  initial  fund  of  $1,000,000. 

Managed  by  the  Employers 

The  amount  of  the  annual  pension  is  the  same  as  for  the  majority 
of  the  industrial  pensions,  that  is,  1  per  cent  of  average  annual  pay 
for  ten  years  preceding  retirement  multiplied  by  the  number  of  years 
of  service.  There  is  also  paid  a  small  death  benefit,  and  certain  sick- 
ness and  accident  disability  benefits. 

These  pension  systems  are  managed  by  the  employers. 

6.  PENSION   SYSTEMS   FOR  TEACHERS   IN   COLLEGES 

AND  UNIVERSITIES 

Colleges  and  universities  were  early  in  the  pension  field.  This 
was  probably  due  to  the  fact  that  the  tenure  of  office  was  so  secure  that 
a  man  was  likely  to  continue  on  full  pay  after  his  efficiency  had  very 
much  declined  if  there  were  no  pension  systems  in  operation. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  247 

a.     The  Carnegie  Foundation 

In  1905,  Andrew  Carnegie  provided  resources  for  the  establish- 
ment of  a  retirement  allowance  system  for  college  and  university  pro- 
fessors of  the  United  States  and  Canada,  with  a  permanent  fund  of 
$10,000,000,  and  an  approximate  annual  income  of  $500,000.  Under 
the  original  provision,  denominational  schools  and  state  universities 
were  not  included.  In  1905  Mr.  Carnegie  extended  the  benefits  to 
state  universities,  and  at  the  same  time  added  $5,000,000  to  the  endow- 
ment, making  a  total  of  $15,000,000  to  be  administered  by  the  trustees 
of  the  Carnegie  Foundation.  At  the  present  time  the  system  includes 
seventy-three  accepted  institutions.  From  the  start  the  Foundation 
accepted  only  institutions  that  conformed  to  certain  standards  of  admis- 
sion and  of  educational  policy. 

The  amount  of  the  pension  is,  in  general,  one-half  salary  plus 
$400  payable  at  and  after  age  65  to  a  professor  of  a  certain  prescribed 
period  of  service.  There  is  an  exception  in  the  case  of  a  teacher 
whose  active  pay  is  less  than  $1,200.  In  this  case  the  pension  is  $1,000, 
providing  no  retirement  allowance  shall  exceed  90  per  cent  of  active 
pay. 

Disability  pensions  are  paid  if  a  teacher  becomes  disabled  after 
attaining  the  age  of  55  and  having  25  or  more  years  of  service  as  a 
professor,  30  or  more  years  as  instructor  and  professor. 

Making  Changes  to  Put  Carnegie  Foundation  on  Actuarially  Sound 
Basis 

The  Foundation  has  made  valuable  studies  of  pension  plans  and 
is  in  the  process  of  making  decided  changes  in  its  plans.  It  became 
clear  that  even  the  large  fund  at  its  disposal  would  not  go  far  toward 
paying  pensions  to  all  teachers  in  institutions  that  were  eligible. 
Through  the  Carnegie  Corporation,  additional  funds  have  been  pro- 
vided to  carry  out  the  pension  plans  to  teachers  on  the  instructional 
staffs  of  the  accepted  institutions  as  6f  a  certain  date,  subject,  however, 
to  advancing  the  retirement  age  for  all  but  a  group  of  men  near  retire- 
ment age. 

It  is  calculated  actuarially  that  sufficient  funds  are  available  to 
carry  out  this  plan.  Furthermore,  a  comprehensive  plan  of  annuities, 
and  insurance  is  proposed,  and  will  probably  soon  be  put  into  opera- 
tion. This  plan  is  an  actuarially  sound  reserve  plan  to  which  teachers 
and  their  institutions  are  to  contribute.  The  Carnegie  Corporation  has 
contributed  $1,000,000  as  capital  stock  for  the  insurance  company 
which  constitutes  part  of  the  new  plan. 

17 


248  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

b.     Pension  Systems  of  Colleges  Not  on  Carnegie  Foundation  List 

There  have  been  established  within  the  past  few  years  pension 
systems  in  a  number  of  educational  institutions  not  on  the  accepted 
list  of  the  Carnegie  Foundation,  but  none  of  these  systems  seems  to 
represent  a  permanent  advance  in  pension  plans,  but  simply  part  of 
a  general  movement  to  provide  some  form  of  a  retirement  annuity. 

7.     CLERGY  PENSION  FUNDS 

During  the  past  few  years  nearly  every  conference  or  synod  seems 
to  have  discussed  the  subject  of  pensions  for  superannuated  clergymen. 
Many  denominations  have  had  much  experience  with  various  agencies 
attempting  to  provide  relief  for  old  and  disabled  ministers  and  their 
dependents.  Within  the  past  few  years,  there  have  been  special  efforts 
by  many  denominations  to  deal  with  the  problem  of  old  age  retirement 
of  ministers  in  a  more  comprehensive  manner. 

A  few  illustrations  will  serve  to  show  this  tendency. 

The  Methodist  Episcopal  Church  recently  raised  an  endowment 
fund  of  $10,000,000  for  pensions  to  be  administered  by  the  Board  of 
Conference  Claimants,  which  had  previously  at  its  disposal  annual 
contributions  from  the  churches  and  from  the  profits  on  the  sale  of 
books  by  the  book  company  of  the  church.  While  in  this  movement  to 
raise  $10,000,000  there  is  shown  some  notion  of  the  demands  on  the 
fund,  there  does  not  seem  to  be  an  appreciation  of  the  need  of  actuarial 
determination  of  the  cost  of  pensions. 

Oversubscribe  Fund  to  Place  System  on  Sound  Basis 

The  Protestant  Episcopal  Church  has  during  the  past  five  years 
made  more  significant  progress  with  its  pension  problem  than  any 
other  church,  so  far  as  we  know.  This  church  approached  the  problem 
in  a  scientific  manner  by  a  careful  study  of  the  accrued  liabilities  that 
exist  under  a  proposed  set  of  benefits.  An  appeal  for  $5,000,000  to 
put  the  system  on  a  sound  basis  was  oversubscribed,  and  proper  con- 
tributions are  being  made  by  the  churches  annually  to  operate  on  a 
sound  actuarial  basis. 

The  Presbyterian  Church  recently  raised  a  large  permanent  fund 
for  the  use  of  its  Board  of  Ministerial  Relief  and  Sustentation  Fund. 
The  ministers  are  required  to  contribute  sufficient  to  pay  one-fifth  of 
the  benefits. 

Similarly,  there  was  a  movement  in  the  Baptist  Church  in  1914 
to  provide  pensions  under  a  contributory  system  of  which  sufficient 
is  to  be  paid  by  the  clergy  to  provide  $100  per  annum  after  age  65. 
The  sum  was  to  be  brought  up  to  $500  per  annum  by  payments  by 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  249 

the  church.    A  very  similar  system  was  proposed  in  1913  by  the  Na- 
tional Council  of  Congregational  Churches  of  the  United  States. 

These  illustrations  indicate  that  there  is  a  marked  tendency  to 
deal  with  the  problem  of  superannuation  of  the  clergy  in  a  more 
systematic  and  comprehensive  manner  than  has  been  the  practice  in 
the  past. 

GENERAL  POINTS  AND  RECOMMENDATIONS 
Widows'  Pensions  a  Feature  of  Many  Systems 

In  about  one-half  of  the  pension  systems  whose  literature  we  have 
read  in  the  preparation  of  this  chapter,  there  is  a  benefit  offered  in 
the  form  of  a  widows'  pension  when  the  husband  was  receiving  a 
pension,  or  was  entitled  to  receive  a  pension,  subject  to  the  condition 
that  marriage  took  place  before  the  employe  was  of  retirement  age. 
The  most  common  amount  of  such  pension  is  an  annuity  equal  to  one- 
half  that  to  which  the  husband  was  entitled. 

Attitude  with  Respect  to  Employment  for  a  Pensioner 

As  a  general  rule,  under  the  industrial  pension  systems,  a  pen- 
sioner may  engage  in  any  work  not  prejudicial  to  the  company  under 
whose  pension  system  he  is  being  paid  the  pension.  In  some  cases, 
there  is,  however,  less  freedom  to  accept  employment  than  is  indicated 
by  this  statement.  That  is  to  say,  in  the  case  of  some  companies,  he 
must  actually  secure  permission  from  the  pension  board  before  he  can 
accept  work.  Indeed,  one  large  company  goes  farther  by  providing 
that  he  shall  not  accept  employment  without  the  permission  of  the 
Pension  Fund  Committee  and  that  the  company  shall  at  all  times  have 
first  call  on  the  services  of  the  retired  employe. 

State  Regulation  of  Industrial  and  Institutional  Pensions  Is  Rec- 
ommended 

\ 

It  is  explicitly  stated  in  a  number  of  the  pension  plans  mentioned 
above  that  the  directors  of  the  company  reserve  the  right  to  make 
such  modifications  or  changes  as  the  conditions  may  from  time  to  time 
make  necessary,  or  which  in  their  judgment  may  seem  best.  It  is  also 
made  clear  that  no  contractual  obligation  is  to  be  incurred,  and  that 
the  employe  acquires  no  legal  right  to  the  pension. 

Although  he  may  have  no  legal  right,  it  must  be  recognized  that 
he  is  apt  to  have  an  expectation  that  is  nothing  short  of  a  moral  claim. 
There  is  much  likelihood  of  injustice  in  holding  out  to  an  employe  the 
prospect  of  a  more  liberal  pension  than  can  actually  be  provided. 


25o  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-191$ 

It  has  been  charged  that  certain  companies  with  pension  systems 
have  discharged  employes  near  retirement  age  to  avoid  the  payment  of 
the  pension.  It  is  very  doubtful  whether  such  a  charge  could  be  sus- 
tained against  any  reputable  company,  but  the  question  does  arise 
very  forcibly  in  regard  to  the  value  of  the  prospect  of  pension  under 
the  present  unregulated  systems.  Usually,  so  long  as  the  employer  is 
solvent  and  prosperous,  the  pension  will  no  doubt  be  paid,  but  it  is  a 
serious  question  as  to  what  would  happen  if  the  employer  should  dis- 
continue business. 

It  would  be  a  much  safer  plan  if  the  employer  should  create 
an  adequate  reserve  by  setting  aside  currently  as  service  is  being  ren- 
dered the  necessary  amount  to  accumulate  for  pension  purposes. 

Would  Standardize  Plans,  Assure  Adequate  Assets  and  Provide  for 

Transfers 

The  main  purpose  of  state  regulation  would  be  to  standardize 
pension  plans  and  to  report  on  the  status  of  pension  systems  with 
respect  to  the  adequacy  of  assets  that  are  to  be  used  in  the  payment 
of  pensions,  but  such  regulation  could  also  provide  a  plan  by  which 
an  employe  could  in  transferring  from  one  employment  to  another 
transfer  his  pension  rights. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1019  251 


CHAPTER  XVI 


COURTS  AND  PENSION  SYSTEMS— TREND  OF 
DECISIONS 


A  Review  of  Judicial  Decisions  Relating  to  Civil 
Service  Pensions 


CONTENTS  OF  CHAPTER 

1.    Power  of  the  State  to  grant  pensions. 

a.  In  general.     Pensions  based  on  service  rendered  or  disability  in- 
curred after  the  pension  law  is  in  force. 

b.  Pensions  to  persons  retired  before  the  pension  law  goes  into  force. 

c.  Pensions  to  persons  who  retire  after  the  pension  law  goes  into 
force  on  basis  of  service  rendered  or  disability  incurred  before  it 
went  into  force. 

d.  Relief  Associations. 

e.  Miscellaneous  applications  of  general  constitutional  provisions. 

f.  Special  constitutional  provisions. 

g.  Deductions  from  salary  for  pension  fund. 

II.    Power  of  the  State  to  require  municipalities  to  pay  pensions  and  levy 
taxes  for  them. 

III.  Power  of  municipalities  to  grant  pensions. 

IV.  Pensions  as  property. 

a.  Pensions  distinguished  from  gratuities. 

b.  Assignment  of  pensions. 

c.  Creditors'  rights  to  pension  money. 
V.    Persons  entitled  to  pensions. 

a.  Members  of  departments. 

b.  Officers. 

c.  Unmarried  dependents. 

d.  Children. 

e.  Other  dependents. 

f.  Rights  of  survivors  in  succession. 

g.  Persons  retired  from  service. 

h.    Persons  entitled  to  benefit  of  prior  laws. 
VI.     Conditions  preliminary  to  the  right  to  a  pension. 

a.  Disability  and  death. 

b.  Age  and  length  of  service. 

c.  Other  preliminary  conditions. 


252  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

VII.     Conditions  which  defeat  right  to  pensions  or  forfeit  or  subject  to  dis- 
continuance pensions  granted. 

a.  Resignation  and  dismissal. 

b.  Pending  charges. 

c.  Delay. 

d.  Accepting  other  relief. 

e.  Waiver  and  misconduct. 

f.  Fraud,  mistake  and  change  of  circumstances. 
VIII.    Amount  of  pension. 

IX.     Pension  funds. 

a.  Rights  of  beneficiaries. 

b.  Sources. 

X.     Powers  and  duties  of  pension  boards. 

a.  Nature  of  power  exercised. 

b.  The  duty  to  award  pensions  and  its  enforcement. 

c.  Compulsory  retirement  on  pension. 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  253 


CHAPTER  XVI 


COURTS  AND  PENSION  SYSTEMS— THE  TREND 
OF  DECISIONS 


A  Review  of  Judicial  Decisions  Relating  to  Civil  Service 
Pensions  —  Prepared  for  the  Illinois  Pension  Laws 
Commission  of  1918  by  Frederick  Green,  Pro- 
fessor of  Law,  University  of  Illinois 

I.     POWER  OF  THE  STATE  TO  GRANT  PENSIONS 

a.     In  General — Pensions  Based  on  Service  Rendered  or  Disability 
Incurred  After  the  Pension  Law  Is  in  Force 

A  statute  which  provides  for  a  mere  gift  of  public  money  to  an 
individual  or  to  a  class,  necessitating  the  taxation  of  some  persons  for 
the  private  benefit  of  others,  is  invalid.  It  has  been  said  that  it  is  not 
even  an  exercise  of  legislative  power,  within  the  meaning  of  the  con- 
stitutional clauses  which  vest  legislative  power  in  the  general  assembly.1 
At  any  rate,  it  is  well  settled  that  because  legislative  power  is  granted 
for  the  general  good,  and  because  it  is  an  unwarrantable  thing  to  tax 
some  persons  merely  for  the  private  benefit  of  others,  a  person  so 
taxed  is  deprived  of  property  without  due  process  of  law  in  violation 
of  the  due  process  clauses  of  the  state  and  federal  constitutions.'2 
Such  a  gift  might  also,  according  to  circumstances,  violate  Section  20 
of  Article  IV  of  the  Illinois  constitution,  which  provides  that  the  state 
shall  never  in  any  manner  give  its  credit  in  aid  of  any  individual,  Sec- 
tion 22  against  special  laws  granting  exclusive  privileges,  and  Section 
19  against  extra  compensation  after  service  rendered,  as  well  as  Sec- 
tions 23  of  Article  V  and  11  of  Article  IX  forbidding  the  increase 
of  an  officer's  salary  during  his  term. 

1.  Loan  Ass.  v.  Topeka  (1874),  20  Wall.  655. 

2.  State  v.  Edmondson  (1913),  88  Oh.  St.  625,  89  Oh.  St.  351,  106  N.  E. 
41,  holds  that  although  poor  relief  may  take  the  form  of  money  payments 
to  a  special  class  of  poor,  a  statute  is  void  as  appropriating  money  to  a 
private   use    which    provides   annuities    for   poor   blind    persons,    unable    to 
earn   their  living,   and  consequently  includes   those  who,   being   supported 
by  relatives  or  in   charitable   institutions,  are  not  in  danger  of  coming  to 
want. 

Auditor  v.  State  (1906),  75  Ohio  St.  114,  78  N.  E.  955,  7  L.  R.  A.  (N.  S.) 
1196,  accord. 

In  State  Board  v.  Buckstegge  (1916),  18  Ariz.  277,  158  P.  837,  it  was 
considered  that  an  act  pensioning  all  widows  and  pensioning  all  wives  of 
imprisoned  convicts,  would  be  void  as  granting  public  money  to  persons 
who  might  not  need  it. 


254  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

On  the  other  hand,  it  is  generally  agreed  that  it  is  a  valid  exercise 
of  governmental  power  to  provide  for  the  payment  of  pensions  to 
public  officers  or  employes  who  may  in  the  future  be  disabled  in  ser- 
vice or  retired  after  long  service,  and  to  their  dependents  upon  their 
death.  The  expectation  of  such  relief  induces  continued  and  faithful 
service,  much  as  the  payment  of  higher  salaries  might  do ;  and  in  some 
respects  it  probably  does  so  more  effectively,  justly  and  advantageously, 
since  it  combines  the  benefits  which  enure  to  the  public  and  to  the 
individual  from  insurance  against  individual  distress  with  those  arising 
from  the  payment  of  adequate  public  salaries.  Thus  the  establishment 
of  a  pension  fund  for  its  employes  is  within  the  implied  powers  of 
a  private  corporation  because  it  is  a  means  of  properly  carrying  on 
its  business.3  Public  service  pensions  are  consequently  not  mere  gratu- 
ities for  the  private  benefit  of  the  recipients,  but  are  primarily  in  the 
interest  of  the  public,  and  they  are  not  obnoxious  to  any  of  the  con- 
stitutional provisions  referred  to  above.4 

It  is  however  held  in  Missouri  that  the  clause  of  the  Missouri 
constitution  which  prohibits  "a  grant  of  public  money  in  aid  of  an 
individual"  prevents  the  establishment  of  a  police  pension  fund  sup- 
ported by  public  money.5  And  the  South  Carolina  constitution,  which 
forbids  the  granting  of  pensions  except  for  military  and  naval  services, 
is  held  to  prevent  pensions  to  persons  disabled  in  civil  service,  though 
not  granted,  as  military  and  naval  pensions  usually  are,  by  laws  passed 

3.  Heinz  v.  National  Bank  of  Commerce  (1916),  237  Fed.  942;  State 
v.  Pittsburg  etc.  R.  Co.  (1903),  68  Oh.  St.  9,  67  N.  E.  93;  Henderson  v.  Bank 
of  Australasia  (1888),  40  Ch.  Div.  170. 

4.  Hughes  v.  Traeger   (1914),  264  111.  612;   People  v.  Abbott   (1916), 
274  111.  380;  Pennie  v.  Reis  (1889),  80  Cal.  266,  22  P.  176;  O'Dea  v.  Cook 
(1917),  —  Cal.  —    169  P.  366;  Fellows  v.  Connolly  (Mich.  1916),  160  N.  W. 
581;  State  v.  Love  (1911),  89  Neb.  149,  131  N.  W.  196/34  L.  R.  A.  (N.  S.) 
607;   Allen  v.    Board   of   Education    (1911),   81    N.   J.    Law    135,   79   A.    101, 
affirmed  86  A.  1102;  Pearce  v.  Board  of  Education  (1914),  85  N.  J.  Law  520, 
89  A.  1026;  Hammitt  v.  Gaynor  (1913),  144  N.  Y.  Supp.  123,  127,  82  Misc. 
Rep.  196;  Hammond  v.  Fulton  (1917),  220  N.  Y.  337,  115  N.  E.  998,  Ann. 
Cas.  1917C,  1137  (death  benefit  of  $500  for  next  of  kin  is  valid);  State  v. 
Hauge   (1917),  37  N.  Dak.  583,  164  N.  W.  289;  Commonwealth  v.  Walton 
(1897),  182  Pa.  St.  373,  38  A.  790,  61  Am.  St.  Rep.  712;  Commonwealth  v. 
Barker  (1905),  211  Pa.  St.  610,  61  A.  253;  cases  in  notes  33  and  34,  infra; 
1  Dillon,  Municipal  Corporations,  Sec.  430. 

See  also  Cass  Co.  v.  Nixon  (1917),  35  No.  Dak.  601,  161  N.  W.  204 
(mothers'  pension);  State  v.  Handlin  (1917),  38  So.  Dak.  550,  152  N.  W. 
379  (bounty  to  enlisted  men).  Compare  Conlin  v.  Supervisors  (1893),  9 
Cal  17,  21  L.  R.  A.  474  (payment  of  a  claim  of  merely  moral  obligation  is 
a  "gift");  Opinion  of  Justices  (1917),  —  N.  H.  — ,  100  A.  49  (N.  H.  con- 
stitution forbids  pensions  except  in  consideration  of  services  and  pensions 
for  not  more  than  a  year.) 

5.  State  v.  Ziegenhein  (1898),  144  Mo.  283,  45  S.  W.  1099,  66  Am.  St. 
Rep.  420;  State  v.  Kimmel  (1914),  256  Mo.  611,  165  S.  W.  1067. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  255 

after  the  event,  but  by  laws  in  reliance  upon  which  the  service  was 
rendered  in  which  the  disability  was  incurred.6 

Moreover  the  South  Carolina  court  thinks  that  as  firemen's  pen- 
sions are  not  direct  pay  for  service  rendered,  they  benefit  the  public 
only  indirectly,  substantially  as  might  pensions  to  disabled  miners, 
locomotive  engineers,  or  other  private  persons  engaged  in  dangerous 
work  of  public  benefit,  and  constitute  essentially  an  appropriation  of 
public  money  to  private  use.  A  similar  opinion  was  expressed  as  to 
teachers'  pensions  .by  Robinson  J.,  dissenting,  in  a  North  Dakota  case.7 
He  said :  "As  there  are  few  who  are  so  stupid  as  to  make  of  teaching 
a  life  business,  the  chances  are  that  a  hundred  persons  must  contribute 
to  the  fund  for  every  person  who  wins  a  prize  or  pension.  Hence  the 
act  does  in  effect  provide  for  a  kind  of  lottery.  *  *  *  Now,  calling  it 
by  any  name,  the  giving  of  a  prize,  donation  or  gift  to  a  school  teacher ' 
is  not  giving  it  for  public  purposes."  The  Indiana  court,  in  holding 
void  for  lack  of  uniformity  a  tax  for  a  firemen's  pension  fund,  spoke 
of  the  firemen  as  an  unduly  favored  class,  for  whose  pensions,  when 
employed  by  cities,  the  state  could  not  tax.8 

b.     Pensions  to  Persons  Retired  Before  the  Pension  Law  Goes  Into 
Effect 

An  attempt  has  sometimes  been  made  to  pension,  not  merely  per- 
sons who  might  in  future  retire  from  public  service,  but  also  those  who 
at  the  time  the  pension  act  went  into  effect  had  already  retired.  The 
theory  that  pensions  are  of  public  benefit  in  inducing  faithful  and 
continued  service  on  the  part  of  the  person  pensioned  is  inapplicable 
to  such  a  case,  and  the  validity  of  the  pension  must  depend  on  whether 
its  grant  fulfils  in  some  other  way  a  legitimate  governmental  purpose. 
The  federal  government  grants  pensions  for  past  military  service  and 
most  governments  have  granted  pensions  in  recognition  of  past  public 
civil  service  of  exceptional  distinction  or  danger.  If  such  pensions  con- 
stitute an  appropriate  exercise  of  , public  generosity  or  manifestation 
of  public  gratitude,  then,  unless  the  state  is  constitutionally  incapable 
of  gratitude  or  generosity,  they  would  seem  to  be  valid  on  that  ground 
alone.  But  pensions,  like  monuments  to  distinguished  men,  may  not 
only  testify  to  public  gratitude,  but  be  deemed  to  inspire  emulation 
and  to  stimulate  patriotism.  Yet  though  the  decisions  indicate  that 
such  pensions  may  be  granted  in  exceptional  cases,  they  show  that  it 

6.  Aetna  Fire  Ins.  Co.  v.  Jones  (1907),  78  S.  C.  445,  59  S.  E.  148,  13 
L.  R.  A.  (N.  S.)  1147. 

7.  State  v.  Hauge  (1917),  37  N.  D.  583,  164  N.  W.  289. 

8.  Henderson  v.   London  etc.  Ins.  Co.   (1893),   135  Ind.  23,  34,  34  N. 
E.  565,  20  L.  R.  A.  827,  41  Am.  St.  Rep.  410. 


256  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

is  hard  to  draw  the  line  that  separates  them  from  pensions  which  are 
mere  gratuities  for  private  benefit.9 

9.  "To  show  gratitude  for  meritorious  public  services  in  the  army  and 
navy  by  liberal  provision  for  those  who  have  performed  them  is  not  only 
proper  in  itself,  but  it  may  reasonably  be  expected  to  have  a  powerful 
influence  in  inciting  others  to  self-denying,  faithful  and  courageous  services 
in  the  future,  when  the  government,  which  is  so  ready  to  be  generous,  as 
well  as  just,  shall  have  need  of  their  assistance.  The  same  may  be  said  of 
a  like  recognition  of  valuable  public  services  rendered  by  other  persons. 
The  question  in  every  case  is  not  one  of  power  but  of  prudence  and  pub- 
lic policy."  1  Cooley  on  Taxation  (3rd  ed.),  189,  quoted  by  Carter,  J.,  in 
People  v.  Abbott  (1916),  274  111.  380,  388. 

To  a  legislative  inquiry  in  reference  to  the  validity  of  a  proposed 
statute,  the  justices  of  the  Supreme  Court  of  Massachusetts  answered  that 
the  legislature  may  continue  the  salary  of  one  who  has  died  in  office 
for  the  benefit  of  his  widow  for  the  rest  of  his  term,  if  it  can  fairly  be 
thought  that  doing  so  will  serve  the  public  good;  but  may  not  do  so  if 
the  only  public  good  is  that  which  is  incidental  to  the  relief  of  an  individual; 
and  that  to  a  great  extent  the  distinction  must  be  left  to  the  conscience 
of  the  legislature.  They  expressed  an  opinion  that,  where  there  is  an  obli- 
gation in  justice,  a  sufficient  public  advantage  exists  "in  the  manifestation 
that  the  sovereign  power  is  just,"  that  a  gift  to  soldiers  after  war  of  a 
memorial  hall  might  be  valid  (see  Kingman  v.  Brockton  (1891),  153  Mass. 
255,  256),  as  would  be  pensions  to  honor  courage  and  give  hope  of  gen- 
erosity to  those  who  may  in  future  risk  their  lives,  but  that  to  justify  a 
gratuity  for  past  civil  service,  the  service  should  be  conspicuous  and  greatly 
deserving.  (Opinion  of  the  Justices  (1900),  175  Mass.  599).  On  a  similar 
occasion  the  justices  of  the  same  court  said  that  pensions  for  past  services 
may  be  justified  if  the  services  are  "such  as  generally  have  been  treated 
as  deserving  recognition  by  the  payment  of  sums  of  money,  the  erection  of 
statues  or  the  bestowal  of  medals,  decorations  or  other  badges  of  honor," 
and  that'  "the  question  ordinarily  will  be  whether  the  benefit  is  conferred 
as  an  appropriate  recognition  of  distinguished  or  exceptional  service,  such 
that  the  dignity  of  the  state  will  be  enhanced  and  the  loyalty  and  patriotism 
of  the  people 'will  be  promoted  by  making  it  a  subject  of  governmental 
action."  (Opinion  of  Justices  (1906),  190  Mass.  611,  77  N.  E.  820.)  And, 
to  a  later  inquiry,  they  answered  that  if  the  purpose  and  effect  of  payment 
for  past  service  are  not  merely  to  compensate,  but  to  promote  loyalty  and 
encourage  future  sacrifice  for  the  public  welfare  in  hope  of  like  recognition, 
payment  may  be  made,  and  the  purpose  of  the  legislature  is  not  subject 
to  review.  (Opinion  of  Justices  (1912),  211  Mass.  608,  98  N.  E.  338.) 

It  may  be  observed  that  so  far  as  pensions  for  past  service  depend  for 
validity  on  their  tendency  to  encourage  future  sacrifice,  it  is  important  to 
notice  whether  the  law  already  provides  pensions  for  future  service,  for,  if 
it  does,  pensions  for  past  service  may  be  superfluous. 

In  Matter  of  Mahon  v.  Board  (1902),  171  N.  Y.  263,  63  N.  E.  1107,  89 
Am.  St.  Rep.  810,  it  was  said  that,  in  absence  of  special  restriction,  the 
legislature  may  "recognize  claims  founded  in  equity  and  justice  in  the 
largest  sense  of  those  terms,  or  in  gratitude  or  charity.  *  *  *  It  can  make 
appropriations  of  money  whenever  the  public  well  being  requires  or  will 
be  promoted  by  it,  and  it  is  the  judge  of  what  is  for  the  public  good."  But 
the  court  considered  that  the  special  restrictions  in  the  New  York  consti- 
tution against  extra  compensation  to  public  officers,  and  against  giving 
money  in  aid  of  any  individual  cut  down  the  legislature's  power  to  make 
gifts  in  evidence  of  public  gratitude,  and  held  invalid  pensions  to  teachers 
retired  before  the  pension  act  was  passed. 

See  also  Bosworth  v.  Harp  (1913),  154  Ky.  559,  upholding  pensions 
to  indigent  ex-confederate  soldiers. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


257 


In  the  leading  case  of  State  v.  Love,10  Root,  J.,  after  stating  that 
a  pension  to  former  paid  firemen,  given  for  length  of  service  only, 
would  violate  a  constitutional  provision  against  extra  compensation 
after  services  rendered,  said:  ''It  is  a  matter  of  common  knowledge 
that  the  legislature  appropriates  money  for  the  benefit  of  citizens  in- 
jured while  assisting  in  the  capture  of  criminals,  and  its  right  to  do 
so  does  not  rest  upon  the  principle  that  thereby  compensation  is  paid 
for  the  time  devoted  to  the  public  service,  but  it  is  justified  upon  the 
broad  ground  that  the  state  owes  the  citizen  a  moral  duty  to  pay  him 
for  injuries  received  while  discharging  a  duty  imposed  by  the  necessi- 
ties of  the  state  upon  all  citizens,  but  which  he  has  performed  for 
them.  The  duty  to  extinguish  conflagrations  is  also  a  public  one,  and 
the  state  is  under  the  same  obligation  to  its  injured  firemen  that  it 
owes  to  the  citizen  who  is  injured  while  assisting  in  the  capture  of  a 
criminal.  The  legislature  may  transform  that  duty  into  a  legal  obli- 
gation, and  impose  it  upon  the  municipalities  by  statutes  general  in 
their  application  to  the  class  of  cities  affected  by  them."11 

But  even  where  the  grant  is  to  persons  who  have  rendered  excep- 
tional public  service,  if  the  conditions  of  the  grant  show  it  to  be  a 
mere  gift  as  distinguished  from  a  reward  for  the  service,  it  is  void. 
Thus  there  is  no  right  to  build  at  public  expense  a  hall  for  the  use  of 
a  particular  Grand  Army  post;12  nor  may  a  city  pension  its  residents 
disabled  in  the  fire  service  of  other  cities  ;13  nor  may  a  state  pension 
resident  veterans  of  the  civil  war,  irrespective  of  indigence  or  disability, 
who  served  from  other  states.14  Where  service  has  been  of  no  especial 
distinction  or  danger,  a  law  which  authorizes  a  grant  of  money  be- 
cause of  it,  passed  after  the  grantee  has  wholly  retired  from  the  ser- 
vice, has  frequently  been  decided  to  be  no  more  justifiable  than  a  gift 
of  public  money  to  any  other  citizen  would  be,  and  it  is  void.15 

10.  (1911)  89  Neb.  149,  131  N.  W.  196,  34  L.  R.  A.  (N.  S.),  607. 

11.  See,  also,  Firemen's  Benevolent  Ass.  v.  Lounsbury  (1859),  21  111. 
511;  People  v.  Metz  (1907),  104  N.  Y.  Supp.  115,  120  App.  Div.  565  (asso- 
ciation  of  retired  volunteer   firemen   relieved   from   water   rates);    Exempt 
Firemen's  Ass.  v.   Little  Falls   (1911),  132  N.  Y.  Supp.  798,   148  App.  Div. 
440;  The  language  in  Trustees  v.  Roome  (1883),  93  N.  Y.  131,  45  Am.  Rep. 
217,  tends  to  support  relief  to  retired  volunteer  firemen  disabled  or  indi- 
gent, as  analogous  to  exempting  them  after  a  term  of  service  from  militia, 
jury  or  constabulary  duty. 

12.  Kingman  v.  Brockton  (1891),  153  Mass.  255,  26  N.  E.  998. 

13.  Taylor  v.  Mott  (1899),  123  Cal.  497,  56  P.  256. 

14.  Beach  v.  Bradstreet  (1912),  344  Conn.  34,  82  A.  1030. 

15.  People  v.  Abbott  (1916),  274  111.  380,  385,  386  (semble);  State  v. 
Love  (1911),  89  Neb.  149,  131  N.  W.  196,  34  L.  R.  A.  (N.  S)  607;  Mead  v. 

.Acton  (1885),  139  Mass.  341  (semble);  Dillon,  Mun.  Corp.  (5th  ed.)  Sec.  430. 
But  see  Eddy  v.  Morgan  (1905),  118  111.  App.  138,  reversed  on  ground  that 
the  statute  should  not  be- construed  retroactively  in  (1905),  216  111.  437. 


258  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

There  is  no  moral  obligation  to  pension  persons  retired  after  long 
service  which  will  support  a  pension.10  Such  a  pension  is  merely 
additional  compensation  for  past  services,  and  the  fact  that  the  original 
compensation  may  be  thought  to  have  been  inadequate  will  not  justify 
it.  On  this  principle  bounties  intended  merely  as  additional  compen- 
sation to  enlisted  soldiers  for  completed  military  service  are  void  as 
not  for  a  public  purpose.17 

However,  the  Public  Service  Act  of  1899  of  New  South  Wales 
granted  pensions  to  officers  already  retired  as  well  as  to  those  who 
should  retire  in  future,  and  the  grant  was  enforced  in  the  highest 
British  court  of  colonial  appeal,  without  suggestion  that  the  pension 
was  improper.18  The  attitude  of  the  New  South  Wales  legislature 
and  of  the  Privy  Council  tends  to  show  that  the  motive,  at  least,  which 
admits  officers  already  retired  to  the  benefits  of  a  newly  established 
pension  system  on  equal  terms  with  former  associates  who  may  retire 
thereafter,  is  not  necessarily  a  mere  desire  to  make  a  gift  of  the  com- 
munity's money  to  persons  capriciously  singled  out  from  the  mass  to 
be  recipients  of  favor. 

The  principle  which  in  general  forbids  the  establishment  of  pen- 
sions for  services  already  past  has  been  applied  to  invalidate  a  statute 
continuing  to  widows  of  policemen  the  pensions  of  their  deceased 
husbands,  in  the  case  of  a  widow  whose  husband,  retired  on  a  pension, 
had  died  before  the  statute  was  passed.19  If  this  application  is  sound, 
it  would  seem  also  invalid  to  increase  pensions  already  granted20  or 

16.  Matter  of  Mahon   (1902),   171   N.  Y.  263,  63  N.   E.   1107,  89  Am. 
St.  Rep.  810,  aff'g.  74  N.  Y.  Supp.  172,  68  App.  Div.  154;  People  v.  Partridge 
(1902),  172  N.  Y.  305,  65  N.  E.  164,  reversing  77  N.  Y.  Supp.  1137,  74  App. 
Div.  620. 

17.  Mead  v.  Acton  (1885).,  139  Mass  341;  Opinion  of  Justices  (1904), 
186  Mass.  603,  72  N.  E.  95;  Opinion  of  Justices   (1906),  190  Mass  611,  77 
N.  E.  820;  Perkins  v.  Milford  (1871),  59  Me.  315;  Bush  v.  Board  (1899),  159 
N.  Y.  212,  53  N.  E.  1121,  45  L.  R.  A.  556,  70  Am.  St.  Rep.  538;  Matter  of 
Chapman  v.  City  of  N.  Y  (1901),  168  N.  Y.  80,  61  N.  E.  108  (holding  void 
a  statute  for  repaying  to  a  public  officer  expenses  he  incurred  in  success- 
fully defending  a  proceeding  to  remove  him  from  office);  Wolcott  v.  Mayor 
(1915),  10  Del.  Chan,  384,  95  A.  303  (holding  it  unconstitutional  to  pay  extra 
compensation    for    past    services    though    they    were    exceptionally    arduous 
and  the  duties  of  the  office  had  been  increased  during  the  term).     But  see 
Opinion  of  Justices   (1864),  45  N  H.  593;  and  compare  Larimer  v.  Super- 
visors (1868),  47  111.  36. 

18.  Williams  v.  Macharge  (1910),  A.  C.  476. 

19.  People  v.  Partridge  (1902),  172  N.  Y.  305,  65  N.  E.  164,  reversing 
77  N.  Y.  Supp.  1137,  74  App.  Div.  620. 

20.  State  v.  Love  (1911),  89  Neb.  149,  131  N.  W.  196,  34  L.  R.  A.  (N. 
S.)  607.     But  see  State  v.  Farley  (1901),  22  Ohio  Cir.  Ct.  Rep.  48,  12  Ohio 
Cir.  Dec.  273. 


I 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  259 

to  provide  that  the  pensions  should  be  continued  to  the  widows  of 
pensioners  not  in  service  who  might  thereafter  die.21 

The  statutes  of  Illinois  and  of  some  other  jurisdictions  provide 
in  some  instances  for  the  recall  to  service,  in  case  of  emergency  or 
recovery,  of  policemen  pensioned  for  disability.  It  does  not  appear 
to  have  been  decided  whether  such  policemen  are  to  be  treated  as  if 
still  in  service  so  far  as  concerns  the  validity  of  an  increase  of 
pensions.210 

If  services  are  performed  while  a  law  is  in  effect  which  holds 
out  the  expectation  of  a  pension,  the  state  may  legitimately  fulfil  the 
expectation  it  has  legitimately  aroused,  presumably  to  its  profit,  and 
award  the  pension  even  by  a  law  passed  after  the  services  are  com- 
pleted. So,  where  a  statute  declared  that  the  legislature  would  com- 
pensate militiamen  injured  on  duty,  a  special  appropriation  of  $2500 
to  a  militiaman  so  injured  was  sustained.22  And  where  by  the  law 
in  force  when  an  officer  retired  he  was  entitled  to  a  pension,  and 
the  law  was  repealed,  and  three  weeks  later  another  law  revived  the 
right,  the  revival  was  held  valid.23  On  this  principle  are  to  be  sup- 
ported the  numerous  laws  of  unquestioned  validity  which  repeal  earlier 
pension  acts  and  continue  pensions  granted  under  them. 

c.  Pensions  to  Persons  Who  Retire  After  the  Pension  Law  Goes 
Into  Force  on  Basis  of  Service  Rendered  or  Disability  In- 
curred Before  It  Went  Into  Force 

Statutes  frequently  provide  for  pensions  to  persons  then  in  ser- 
vice, on  retirement  after  service  for  a  stated  number  of  years.  This 
may  result  in  the  speedy  retirement  of  officers  or  employes  on  the 
basis  of  service  all  or  practically  all  performed  before  the  law  took 
effect,  so  that  the  statute  could  not  have  induced  faithfulness  or  con- 
tinuance in  the  service,  but  on  the  contrary  has  clearly  induced  an 
abandonment  of  it.  The  question  arises  whether  in  such  a  case  the 
pension  is  anything  but  a  gift  for  private  benefit,  or  is  distinguishable 

21.     But  see  Eddy  v.  Morgan  (1905),  216  111.  437. 

21a.  See  McGann  v.  Harris  (1904),  114  111.  App.  308  (a  discharged 
policeman  is  not  eligible  to  retirement  on  pension  subject  to  emergency 
duty,  for  a  pensioner  so  subject  is  still  a  member  of  the  force);  Kavanaugh 
v.  Board  (1901),  134  Cal.  50,  66  P.  36;  Dionne  v.  Queen  (1895),  24  Canada 
Sup.  Ct.  451;  Moffatt  v.  Lowell  (1913),  215  Mass.  92;  Price  v.  St.  Louis 
Police  Relief  Ass.  (1901),  90  Mo.  App.  210;  Halsbury's  Laws  of  England 
Vol.  24,  Sec.  686;  Waldron  v.  Croghan  (1881),  7  L.  R.  Ir.  320;  MacDonald 
v.  O'Toole  (1908),  2  I.  R.  386;  Collier  y.  The  King  (Australia,  1901),  27 
Vic.  L.  R.  25,  234  (a  pensioned  official  "is  still  in  the  service  though  on  a 
sort  of  reserved  or  retired  list"). 

'  22.    Woodhall  v.  Darst  (1912),  71  W.  Va.  350,  77  S.  E.  264,  80  S.  E. 
367. 

23.    State  v.  Board  (1917),  141  La.  427,  75  So.  103. 


260  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

from  a  pension  to  an  officer  already  retired.  Two  answers  have  been 
made.  First,  it  has  been  said  that  a  public  benefit  accrues  "by  retiring 
from  the  public  service  those  who  by  devoting  their  best  energies  for 
a  long  period  of  years  to  the  performance  of  duties  in  a  public  office 
or  employment  have,  by  reason  thereof,  or  of  advanced  age,  become 
incapacitated  from  performing  the  duties  as  well  as  they  might  be 
performed  by  others  more  youthful  or  in  greater  physical  or  mental 
vigor."24 

It  may  be  added  that,  even  if  the  officer  is  removable  for  inca- 
pacity or  at  will,  the  legislature  may  reasonably  think  it  conducive 
to  efficiency  to  determine  the  time  of  his  retirement  by  letting  the  officer 
decide  when  to  accept  a  pension,  rather  than  by  imposing  on  a  reluctant 
superior  a  duty  of  deciding  when  to  dismiss  him  without  a  pension  and 
perhaps  to  poverty.  Further,  if  the  grant  is  regarded  solely  as  a 
reward  or  testimonial  of  gratitude  for  long  and  faithful  service,  there 
is  perhaps  a  difference  between  one  who,  when  his  title  to  public 
bounty  accrues,  still  holds  the  office  or  employment  in  which  his  labors 
were  performed,  and  a  private  citizen  whose  services  to  the  community 
lie  wholly  in  the  past. 

A  second  reason  advanced  in  support  of  pensions  to  present  office 
holders  based  on  past  service,  is  that  a  little  time,  at  least,  must  pass 
after  the  act  takes  effect  before  the  officer  can  retire.  There  is  always 
some  period  of  service  under  the  act,  and  it  is  said  the  pension  is  part 
of  the  compensation  for  this  period,  arid  the  magnitude  of  the  com- 
pensation is  for  the  legislature  to  determine.25  But  it  is  hard  to  see 
how  offered  payment  can  properly  be  treated  as  compensation  in 
exchange  for  which  service  has  been  performed  on  the  sole  ground 
that  it  was  physically  impossible  for  an  employe  to  resign  quickly 
enough  to  avoid  becoming  entitled  to  it.  Moreover,  as  will  appear, 
a  pension  is  not  awarded  as  compensation,  but  as  a  revocable  gratuity. 
Being  a  gratuity  it  requires  special  justification,  and  this  justification 
is  not  given  by  denying  that  it  is  a  gratuity  and  calling  it  compen- 
sation. 

A  better  and  sufficient  reason  seems  to  be  that  as  the  legislature, 
to  induce  faithful  service,  may  provide  a  pension  for  twenty  years' 


24.  Dillon,    Mun.    Corps.    (5th    ed.)    Sec.    430.     To    same    effect    are 
People   v.   Abbott    (1916),   274   111.   380   (retirement   after   law   took   effect, 
but  before  pension  fund  was  established  or  pension  applied  for);   Pearce 
v.  Board  of  Education  (1914),  85  N.  J.  Law  520,  89  A.  1026;  Van  Dyke  v. 
Board  (1916),  88  N.  J.  Law  492,  96  A.  671;  Fellows  v.  Connolly  (Mich.  1916), 
160  N.  W.  581. 

25.  This  theory  is  advanced  in  State  v.  Love  (1911),  89  Neb.  149,  131 
N    W.  196    34  L.  R.  A.  (N.  S.)  607,  and  is  the  ground  of  the  decision  in 
Hammitt  v.  Gaynor  (1913),  144  N.  Y.  Supp.  123,  82  Misc.  196. 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  261 

service,  provided  five  of  those  years  are  in  the  future,26  it  may,  for 
like  reasons  provide  such  a  pension  though  only  five  weeks  or  five 
minutes  of  the  service  are  in  the  future,  because  it  may  determine  how 
long  a  future  service  shall  be  required.  The  legislature  may  treat  alike 
all  who  for  practical  purposes  are  in  an  identical  situation,  and  if  it 
may  grant  pensions  to  those  whose  future  service  to  complete  the  term 
of  twenty  years  is  indefinitely  short,  it  may  include  in  the  grant 
persons  still  in  service  who  have  completed  the  period  in  full. 

d.     Relief  Associations 

In  establishing  a  pension  system,,  the  state  is  not  limited  to  pro- 
viding for  its  administration  through  officers  of  its  own,  nor  to  making 
payments  of  public  money  directly  to  beneficiaries.  Not  .only  may 
it  provide  for  a  pension  board  whose  officers  are  in  a  strict  sense  public 
functionaries,  subject  as  such  to  state  control,  but  instead  of  so  doing, 
the  state  may  delegate  the  administration  of  the  pension  system  to  a 
suitable  agency  such  as  an  incorporated  relief  association,  impose  on 
the  association  a  duty  to  use  the  fund  for  the  benefit  of  those  whom 
the  state  wishes  to  pension,27  and  appropriate  and  pay  public  money 
to  the  association  as  it  might  have  appropriated  it  to  a  similar  pension 
fund  of  its  own.  Such  a  payment  is  not  an  appropriation  or  gift  to 
an  individual  within  the  meaning  of  a  constitutional  prohibition.28  In 
many  of  the  larger  cities  firemen's  or  policemen's  associations  of  this 
character  exist  or  have  existed.  They  have  frequently  been  incor- 
porated by  special  act,  and  are  usually  supported  by  dues  or  assess- 
ments imposed  on  the  members  as  well  as  by  moneys  contributed  by 
the  city  or  state. 

It  is  essential  however  to  the  validity  of  a  law  providing  for  the 
payment  of  public  money  to  a  relief  association  that  there  exist  a  legal 
right  in  some  person  or  body  to  compel  the  association-to  use  the  money 
in  carrying  out  the  public  purpose  fqr  which  it  was  given.  Payment 
to  an  association  which  was  under  no  obligation  as  to  the  use  of  the 
money,  or  which  had  power  to  use  it  in  a  way  in  which  the  state  would 
not  be  justified  in  using  it,  would  be  unconstitutional  for  the  reasons 

26.  See  Heinz  v.  National  Bk.  of  Com.  (1916),  237  Fed.  942. 

27.  Commonwealth  v.  Walton   (1897),  182  Pa.  St.  373,  38  A.  790,  61 
Am.  St.  Rep.  712;  Phoenix  Assurance  Co.  v.  Montgomery  (1898),  117  Ala. 
631,  23  So.  843,  42  L.  R.  A.  468;  Fox  v.  Mohawk  Soc.  (1901),  165  N.  Y.  517, 
59  N.  E.  353;  Exempt  Firemen's  Ass.  v.  Little  Falls  (1911),  132  N.  Y.  Supp. 
798,  148  App.  Div.  440  (semble). 

28.  Trustees  v.  Roome   (1883),  93  N.  Y.  313  (membership  and  right 
to  pension  may  be  restricted  to  retired  firemen  and  those  who  have  been  a 
certain  time  in  service);  Commonwealth  v.  Walton   (1897).  182  Pa.  St.  373, 
38  A.  790,  61  Am.  St.  Rep.  712. 


262  ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 

which  in  general  invalidate  gifts  of  public  money  to  individuals.29 
However,  if  an  incorporated  association,  though  voluntarily  formed 
and  not  theretofore  an  agency  of  the  state,  accepts  a  contribution 
of  public  money  to  be  devoted  to  such  relief  of  public  officers  or 
employes  or  their  dependents  as  the  city  or  state  itself  might 
validly  grant,  it  thereby  presumptively  assumes  an  obligation  to  devote 
the  money  to  the  purpose  for  which  it  was  given,  since  it  could  not 
rightfully  be  given  on  other  terms.30  The  obligation  is  of  a  public 
nature,  makes  the  association  in  effect  a  governmental  t  agency,  and 
extends  not  merely  to  the  use  of  the  money  given31  but  to  the  carrying 
out  of  the  entire  pension  scheme  towards  which  it  was  contributed,  so 
far  as  the  total  resources  and  objects  of  the  association  will  permit.32 

Where  the  conditions  for  pension  are  fixed,  and  not  subject  to 
change  by  the  association,  and  are  such  as  the  city  or  state  authorities 
might  consistently  with  their  statutory  and  constitutional  power  have 
established  for  pensions  payable  directly  by  the  city  or  state,  and  the 
pensions  are  payable  not  at  option  but  on  such  terms  as  to  be  enforcible 
by  the  beneficiaries,  through  their  membership  in  the  association,  or  by 
duty  imposed  by  statute  to  .them  or  to  the  state,  the  appropriation  of 
public  money  to  an  incorporated  relief  association  for  such  pensions 
is  valid  and  enforcible,33  and  the  right  of  the  beneficiaries  will  also  be 

29.  See  Kingman  v.  Brockton  (1891),  153  Mass.  255,  26  N.  E.  998  (gift 
to  Grand  Army  post,  to  exclusion  of  veterans  not  members) ;  Aetna  Fire 
Ins.  Co.  v.  Jones  (1907),  78  S.  C.  445,  59  S.  E.  148,  13  L.  R.  A.  (N.  S.)  1147; 
Firemen's  Relief  Ass.  v.  Scranton  (1907),  217  Pa.  585,  66  A.  1103;  De  Runtz 
v.  St.  Louis  Police  Ass.  (1913),  180  Mo.  App.  1,  162  S.  W.  1053. 

30.  Where   clearly   there  was   no   intent  to   assume   the   obliation,   it 
would  not  exist.     See  De  Runtz  v.  St.  Louis  Police  Relief  Ass.  (1913),  180 
Mo.  App.  1,  162  S.  W.  1053. 

31.  Commonwealth  v.  Walton  (1897),  183  Pa.  373,  38  A.  790,  61  Am. 
St.   Rep.   712   (it  seems  the  association  may  be  restrained  from  misapply- 
ing the  money.) 

32.  In  Gibbs  v.  Minneapolis  Fire  Dept.  Relief  Ass.  (1914),  125  Minn. 
174,  145  N.  W.   1075,  the  funds  of  the  association  were  derived  from  con- 
tributions by  the   state  and  dues   from  members,   and  by  its  charter  were 
to  be  used  for  a  system  of  pensions,  including  pensions  to  firemen's  widows, 
as  well  as  for  private  purposes  of  the  association.     The  court  expressed 
an  opinion  that  the  association  was  bound  to  carry  out  the  pension  scheme 
towards  which  it  had  received  public  money,  though  it  had  to  draw  upon 
the  funds  received  as  dues  from  its  members  to  do  it,  and  that  in  carrying 
out  its   other  objects   it  could  not  use  money  from  the   state.     It   decided 
that   the  pension   system  was   under  control   of  the   state,   so  that  an  act 
abolishing  widows'  pensions,  in  case  of  widows  who  had  deserted  their  hus- 
bands, was  valid,   and   this   though   the  pension   fund  was  partly  made  up 
of  dues  which  their  husbands  had  contributed.     This  case  was  followed  in 
Minegar  v.  Minn.  etc.  Ass.  (1914),  126  Minn.  332,  148  N.  W.  279.     Compare 
Buckendorf  v.  Minn.  etc.  Ass.  (1910),  112  Minn.  298,  127  N.  W.  1133. 

33  Firemen's  Benevolent  Ass.  v.  Lounsbury  (1859),  21  111.  511;  Trus- 
tees v.  Roome  (1883),  93  N.  Y.  313;  People  v.  Metz  (1907),  104  N.  Y.  Supp. 
1115,  120  App.  Div.  565;  Exempt  Firemen's  Ass.  v.  Little  Falls  (1911),  132 
N.  Y.  Supp.  798,  148  App.  Div.  440;  Ashley  v.  Fire  Dept.  (1911),  133  N.  Y. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  263 

enforced  by  appropriate  means.34  As  regards  the  means  of  enforce- 
ment, the  decisions  seem  to  justify,  the  statement  that  an  incorporated 
association  which  receives  public  money  for  the  relief  of  public  officers 
or  employes  of  a  certain  class,  owes  to  them  a  duty  to  admit  them  to 
membership  so  far  as  concerns  their  right  to  pension,  and,  in  case  they 
fulfill  the  pension  conditions,  a  duty  to  place  them  on  the  pension  roll. 
Either  duty  may  be  enforced  by  mandamus.35  And  when  admitted  to 
membership,  they  and  their  beneficiaries  have  the  same  rights  as  in 
case  of  ordinary  benefit  associations,  and  may  maintain  action  for  bene- 
fits to  which  they  are  entitled.38 

In  appropriating  funds  to  a  particular  purpose  the  city  or  state 
may,  of  course,  in  the  absence  of  special  restriction,  use  any  money 
or  means  of  income  at  its  disposal,  whatever  the  source  from  which 
it  comes.  Frequently  a  tax  has  been  imposed  on  fire  insurance  com- 
panies at  a  percentage  of  their  premiums  on  policies  effected  within 
the  district,  and  the  proceeds  devoted  to  the  support  of  an  incorporated 
fire  department  or  fireman's  relief  association.37 

Sometimes  instead  of  providing  for  payment  to  the  public  treasury 
for  subsequent  appropriation  over,  statutes  have  assumed  to  impose 

Supp.  591,  73  Misc.  Rep.  636;  Com.  v.  Walton  (1897),  182  Pa.  St.  373  38  A 
790,  61  Am.  St.  Rep.  712;  Com.  v.  Barker  (1905),  211  Pa.  St.  610,  61  A.  253 
(semble);  Phoenix  Ass.  Co.  v.  Fire  Dept.  (1898),  117  Ala.  631,  23  So  843, 
42  L.  R.  A.  468.  And  see  Fire  Dept.  v.  Helfenstein  (1862),  16  Wis.  136; 
Citizens  Ins.  Co.  v.  Herbert  (1916),  139  La.  708  (payments  to  fire  com- 
panies). 

34.  Leffingwell  v.  Kiersted  (1907),  74  N.  J.  Law  407,  65  A.  1029;  Buck- 
endorf  v.    Minneapolis  etc.    Ass.    (1910),    112   Minn.   298;    127   N.   W.    1133; 
Stevens  v.   Minn.  etc.  Ass.    (1914),   124  Minn.  381,  145  N.  W.  35;  Gibbs  v. 
Minn.  etc.  Ass.  (1914),  125  Minn  174,  145  N.  W.  1075. 

35.  Leffingwell  v.  Kiersted  (1907),  74  N.  J.  Law  407,  65  A.  1029  (right 
to  membership);  Buckendorf  v.  Minn.  etc.  Ass.   (1910),  112  Minn.  298,  127 
N.  W.   1133   (a  by-law  excluding  from  membership  firemen  over  a  certain 
age  is  void,  and  a  disabled  fireman,  excluded  for  age,  is  entitled  to  man- 
damus to  place  him  on  the  pension  roll,  though  not  entitled,  it  seems,  to 
relief  "so   far  as   the   fines   and   dues   of  the  association   are   concerned"); 
Stephens  v.  Minn.  etc.  Ass.   (1914),  124  Minn.  381,  145  N.  W.  35   ("Every 
fireman  in  good  standing  and  meeting  the  requirements  of  the  regulations 
of  the  association  is  entitled  as  a  matter  of  legal  right  to  a  place  on  the 
pension  rolls,  whenever  disabled  to  the  extent  declared  by  the  laws  of  the 
association").     And    it    seems   to   be    the   better   rule    that   mandamus    lies 
though  the  association  receives  no  aid  from  the  state.     Fickett  v.   Boston 
Firemen's  Relief  Fund   (1915),  220  Mass.  319,   107  N.   E.  957   (corporation 
created   to   administer   relief  to   members   of   fire   department  cannot   limit 
the  relief  to  fire  fighters).    But  compare  Vannata  v.  Smith  (1897),  61  N.  J.  L. 
188,  38  A.  811;  De  Runtz  v.  St.  Louis  Police  Relief  Ass.  (1913),  180  Mo.  App. 
1,  162  S.  W.  1053. 

36.  Jones  v.  Firemen's  Relief  Ass.  (Wis.  1912),  138  N.  W.  618;  Stevens 
v.  Minn.  etc.  Ass.  (1914),  124  Minn.  381,  145  N.  W.  35;  Gibbs  v.  Minn.  etc. 
Ass.  (1914),  125  Minn.  174,  145  N.  W.  1075. 

37.  Commonwealth  v.  Barker  (1905),  211  Pa.  St.  610,  61  A.  253,  and 
cases  cited  in  succeeding  notes. 

13 


% 
264  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

on  the  insurance  companies  a  duty  to  pay  to  the  fire  department  or 
relief  association  directly.  Such  statutes  have  been  held  to  be  valid  in 
Illinois,  Wisconsin,  New  York  and  Alabama.38  In  some  other  states 
the  correctness  of  these  decisions  has  been  questioned.  If  it  is  attempted 
to  support  the  exaction  as  a  tax,  as  the  Illinois  court  supported  it,  it 
has  been  objected  that  a  tax  cannot  be  made  payable  by  one  class  of 
citizens  to  another;  that  a  state,  for  example,  may  raise  money  by 
taxation  to  pay  its  indebtedness,  but  cannot  grant  to  its  creditors  a 
right  themselves  to  collect  contribution  from  the  community  to  pay  the 
debt ;  that  it  is  essential  that  the  money  pass  through  the  public  treas- 
ury by  levy,  appropriation  and  payment  by  the  city  or  state.39  If,  on 
the  other  hand,  the  statute  is  supported  on  the  ground  that  it  is  an 
exercise  of  police  power  (which  means  perhaps  that  insurance  com- 
panies may  be  made  to  contribute  to  a  fireman's  pension  system  on  the 
same  principle  upon  which  a  man  may  be  made  to  equip  his  house  with 
fire  escapes),  it  has  been  answered,  apart  from  other  objections,  that 
uninsured  owners  of  buildings  benefit  from  the  services  of  a  fire 
department  as  much  and  in  the  same  way  as 'do  insurance  companies, 
and  that  to  impose  a  special  burden  in  the  form  of  a  money  payment 
on  insurance  companies  from  which  other  persons  similarly  situated 
are  free,  is  to  deprive  them  of  property  without  due  process  of  law, 
and  to  deny  them  the  equal  protection  of  the  laws.40 

If,  however,  the  imposition  is  regarded,  as  it  seems  generally  to 
be  intended,  as  a  tax,  the  objection  that  if  confined  to  insurance  com- 
panies it  lacks  uniformity,  or  denies  due  process  or  equal  protection 
of  kw,  though  sometimes  made,  seems  unsound,  because  insurance 
companies  as  a  class  may  be  subjected  to  a  special  excise  for  general 

38.  Firemen's  Benevolent  Ass.  v.  Lounsbury  (1859),  21  111.  511;  Fire 
Dept.  v.  Helfenstein  (1862),  16  Wis.  136;  Trustees  v.  Roome  (1883),  93  N. 
Y.  313,  45  Am.  Rep.  217;  Ashley  v.  Fire  Dept.  1911),  133  N.  Y.  Supp.  591, 
73  Misc.  636;  Phoenix  Ass.  Co.  v.  Fire  Dept.  (1898),  117  Ala.  631,  23  So.  843, 
42  L.  R.  A.  468. 

39.  Philadelphia  Ass.  v.  Wood  (1861),  39  Pa.  St.  73,  approved  in  Fire- 
men's Relief  Ass.  v.  Scranton   (1907),  217  Pa.  St.  585,  66  A.  1103.     Where 
the   payment   is   exacted   from   foreign   companies   alone   as  a   condition   of 
right  to  enter  upon  business  in  the  state,  as  distinguished  from  a  tax  on 
companies  which  have  already  complied  with  the  requirements  for  admis- 
sion to  do  business,  the  objection  is  of  less  force.     Citizens  Ins.  Co.  v.  Her- 
bert (1916),  139  La.  708;  Trustees  v.  Roome  (1883),  93  N.  Y.  313,  45  Am. 
Rep.  217. 

40.  See  State  v.  Merchants'  Ins.  Co.   (1857),   12  La.  Ann.  802;  Hen- 
derson v.  London  etc.  Ins.  Co.  (1893),  135  Ind.  23,  34  N.  E.  565,  20  L.  R.  A. 
827,  41  Am.  St.  Rep.  410;  Aetna  Fire  Ins.  Co.  v.  Jones  (1907),  78  S.  C.  445, 
59  S.  E.  148,  13  L.  R.  A.  (N.  S.)  1147. 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 


265 


revenue  purposes,  and  the  excise  is  no  worse  because  its  proceeds  are 
devoted  before  hand  to  a  particular,  appropriate  purpose.41 

e.  Miscellaneous  Applications  of  General  Constitutional  Provisions 
The  fourteenth  amendment  to  the  federal  constitution  which  for- 
bids states  to  deprive  any  person  of  liberty  or. property  without  due 
process  of  law,  or  to  deny  to  any  person  within  their  jurisdiction  the 
equal  protection  of  the  laws,  and  corresponding  provisions  in  the  con- 
stitutions of  the  states  designed  to  shield  the  individual  from  the 
wanton  and  oppressive  exercise  of  governmental  power,  make  void, 
generally  speaking,  laws  which  arbitrarily  discriminate  against  par- 
ticular classes  of  persons,  either  by  imposing  on  them  burdens  from 
which  others  are  free,  or  by  excluding  them  from  benefits  which  others 
are  permitted  to  enjoy.  On  the  other  hand,  a  statute  based  on  legiti- 
mate reasons  of  justice  and  policy  is  not  obnoxious  to  those  provisions. 
These  principles  were  applied  in  the  following  cases. 

The  Illinois  act  of  1911,  providing  pensions  for  municipal 
employes  in  cities  of  100,000,  excepted  employes  over  60  who  had 
served  less  than  ten  years,  and  laborers  who  did  not  within  six  months 
elect  to  participate.  It  was  held  that  the  excepted  classes  were  not 
deprived  of  the  equal  protection  of  law  or  denied  due  process,  because 
the  advanced  age  of  one  class  and  the  uncertain  tenure  of  the  other 
diminished  their  chances  of  retiring  on  pensions,  and  furnished  a 
rational  basis  for  a  difference  of  treatment  if  the  legislature  saw  fit 
to  make  a  difference.42 

In  a  Minnesota  case,  it  was  held  constitutional  to  exclude  common 
law  wives  from  the  benefits  of  pensions  provided  for  firemen's 
widows.43  And  a  Washington  case  upheld  the  repeal  as  to  abandoned 
wives  of  a  statute  for  pensions  to  widows,  abandoned  wives  and  wives 
of  convicts,  who  were  in  destitution.  The  state,  said  the  court,  may 
for  reasons  of  policy  aid  certain  classes  of  destitute  persons  by  money 
grant,  others  by  almshouse  support,  and  others  not  at  all.44  A  statute 
which  made  a  city  pensioner  incapable  of  holding  city  employment, 
as  distinguished  from  terminating  his  pension  on  his  acceptance  of 
employment,  was  held  invalid,  especially  in  view  of  a  provision  in  the 
state  constitution  that  no  citizen  shall  be  deprived  of  rights  'secured  to 
any  other  citizen  unless  by  judgment  of  his  peers  or  the  law  of  the 


41.  People  v.  Thurber  (1852),  13  111.  554;  Ducat  v.  Chicago   (1868), 
48  111.  172,  affirmed  10  Wall.  410;  Phoenix  Ass.  Co.  v.  Fire  Dept.  (1898),  117 
Ala.  631,  23  So.  843,  42  L.  R.  A.  468. 

42.  Hughes  v.  Traeger  (1914),  264  111.  612. 

43.  Minegar  v.  Minn.  etc.  Ass.  (1914),  126  Minn.  332,  148  N.  W.  279. 

44.  In  re  Snyder  (1916),  93  Wash.  59,  160  P.  12. 


266  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

land.45  Where  a  state-wide  teachers'  pension  fund  was  partly  supported 
by  money  paid  by  the  several  school  districts  at  a  percentage  of  teach- 
ers' salaries,  the  money  paid  by  each  district,  and  ultimately  to  be 
raised  by  taxation  within  it,  thus  bearing  no  exact  relation  to  the 
amount  that  would  be  paid  in  pensions  to  the  teachers  of  that  district, 
this  was  held  not  to  take  money  without  due  process  of  law  or  to  violate 
a  requirement  that  taxes  should  be  uniform.46 

A  legislature  cannot,  in  general,  delegate  its  power  to  make  laws. 
But  it  may  make  the  going  into  effect  of  its  own  law  depend  on  a  con- 
dition on  whose  fulfillment  it  may  reasonably  think  the  expediency  of 
the  law  depends,  and  the  condition  may  sometimes  be  the  wishes  of 
persons  peculiarly  affected  by  the  law.  A  statute  which  makes  the 
substitution  of  a  new  general  teachers'  pension  scheme  in  place  of 
local  pension  funds  depend  in  each  locality  upon  petition  of  two-thirds 
of  the  teachers  there,  is  not  invalid  as  a  delegation  to  the  teachers  of 
power  to  make  law.47 

On  the  other  hand,  a  statute  which  empowers  a  board  to  grant 
pensions  without  laying  down  any  principle  by  which  eligibility  to 
pension  is  to  be  determined  has  been  held  an  invalid  attempt  to  dele- 
gate legislative  power,  and  a  statute  which  authorizes  a  board  to  relieve 
from  duty  any  applicant  who  has  served  twenty  years,  and  directs  it 
to  grant  him  a  pension  if  relieved,  has  been  held  to  be  of  that 
character.48 

f.     Special  Constitutional  Provisions 

Section  13  of  Article  IV  of  the  Illinois  constitution  provides  that 
"no  act  hereafter  passed  shall  embrace  more  than  one  subject,  and 
that  shall  be  expressed  in  the  title."  In  construing  this  section  in  its 
application  to  pension  laws,  the  following  decisions  have  been  made: 
The  word  "pensions"  properly  describes  a  system  of  annual  payments 
to  be  made  from  a  public  fund  to  public  employes  retired  on  disability 
or  after  long  service,  and  an  act  to  provide  for  such  a  system  entitled, 
"An  act  to  provide  for  the  formation  and  disbursement  of  a  pension 
fund  for  municipal  employes"  of  designated  classes,  sufficiently 
expresses  its  subject  in  its  title.49  It  seems  that  the  title,  "an  act  to 
provide  for  the  setting  apart,  formation  and  disbursement  of  a  police 

45.  People  v.  Woodbury  (1902),  77  N.  Y.  Supp.  241,  38  Misc.  Rep.  189. 

46.  Fellows  v.  Connolly  (Mich.  1916),  160  N.  W.  581. 

47.  In  re  Bristol  (1916),  160  N.  Y.  Supp.  410,  173  App.  Div.  545,  af- 
firming 158  N.  Y.  Supp.  503,  93  Misc.  Rep.  626. 

48.  Schmid  v.  Board  (1912),  146  Ky.  335,  142  S.  W.  688. 

49.  Hughes  v.  Traeger  (1914),  264  111.  612. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919        •  267 

pension  fund,"  etc.,  embraces  the  subject  of  pensions  to  any  persons 
connected  with  the  police  department,  and  hence  of  pensions  to  police 
matrons.50  An  act  entitled  "an  act  to  provide  a  pension  fund  for  public 
employes"  may  validly  impose  a  general  tax  to  support  the  fund,  for 
that  is  a  means  to  accomplish  the  purpose  in  regard  to  the  subject 
expressed  in  the  title.51  In  Indiana  it  has  been  held  otherwise  as  to 
a  special  tax  on  fire  insurance  companies,  on  the  ground  that  the  title 
would  not  apprise  one  who  read  it,  that  it  imposed  such  a  tax.52  Under 
a  similar  clause  in  the  constitution  of  New  Jersey,  it  has  been  held 
that  as  the  establishment  of  a  teachers'  pension  fund  tends  to  efficiency 
in  schools,  it  is  germane  to  the  object  expressed  in  the  title  of  an  act 
entitled  "an  act  to  establish  an  efficient  system  of  schools  and  to  pro- 
vide for  its  maintenance  and  management,"  and  that  an  act  so  entitled 
is  not,  by  including  provision  for  a  pension  fund,  rendered  invalid  as 
embracing  more  than  one  object,  or  an  object  not  expressed  in  the 
title,53  A  law  imposing  a  tax  for  the  support  of  a  teachers'  pension 
fund,  entitled  "an  act  to  impose  a  tax  for  the  support  of  public  schools" 
satisfies  the  requirement  of  the  North  Dakota  constitution  that  "every 
law  imposing  a  tax  shall  state  distinctly  the  object  of  the  same,  to 
which  only  it  shall  be  applied."54  The  California  Supreme  Court  has 
held  that  a  law  entitled  "an  act  to  create  a  police  pension  fund"  may 
include  a  provision  merging  the  fund  under  a  former  law  with  the  new 
fund.55 

Section  13  of  Article  IV  of  the  Illinois  constitution  provides  that 
"no  law  shall  be  revived  or  amended  by  reference  to  its  title,  but  the 
law  revived  or  section  amended  shall  be  inserted  at  length  in  the  new 
act."  This  provision  invalidates  the  addition  to  a  police  pension  law  of 
a  section  providing  pensions  for  police  matrons,  without  inserting  the 
sections  of  the  original  law  which  specified  other  persons  who  are  to 
get  pensions,  since  all  those  sections  are  essential  to  an  understanding 
of  the  subject  matter,  as  it  exists  after  the  amendment."58  But  an  act 
imposing  a  tax  for  pensions,  not  to  be  considered  as  part  of  the  general 
tax  lavy,  nor  included  in  the  limitation  of  three  per  cent  of  the  assessed 
valuation  upon  which  taxes  are  required  to  be  extended,  need  not  set 

50.  Lyons  v.  Police  Pension  Board  (1912),  255  111.  139  (act  held  invalid 
on  another  ground). 

51.  People  v.  Huey  (1917),  277  111.  561. 

52.  Henderson  v.  London  etc.  Co.  (1893),  135  Ind.  23,  34  N.  E.  565, 
20  L.  R.  A.  827,  41  Am.  St.  Rep.  410. 

53.  Allen  v.  Board  of  Education  (1911),  81  N.  J.  Law  135,  79  A.  101, 
affirmed  86  A.  1102. 

54.  State  v.  Hauge  (1917),  37  N.  D.  583,  164  N.  W.  289. 

55.  Clarke  v.  Police  Board  (1898),  123  Cal.  24,  55  P.  576. 

56.  Lyons  v.  Police  Pension   Board   (1912),  255  111.   139. 


268  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

forth  the  provisions  of  the  limitation  act,  because  the  pension  act  is 
complete  in  itself,  and  its  effect  may  be  appreciated  without  knowing 
the  provisions  of  the  limitation  act.57  The  California  Supreme  Court 
has  held  that  a  law  creating  a  new  system  of  police  pensions,  and 
repealing  the  former  law,  but  merging  the  old  fund  with  the  new  fund, 
does  not  for  that  reason  amend  the  provisions  of  the  old  law  concern- 
ing the  fund  so  as  to  require  the  new  law  to  set  them  out.58 

Section  22  of  Article  IV  of  the  Illinois  constitution  forbids  local 
or  special  laws  in  enumerated  cases,  and  in  any  other  case  where  a 
general  law  can  be  made  applicable.  Whether  a  general  law  can  be 
made  applicable  is  for  the  legislature  to  determine,  not  for  the  court. 
Hence  an  act  fixing  a  maximum  park  police  pension  tax  for  Lincoln 
Park  district,  and  different  maximums  for  South  Park  and  West  Park 
districts,  though  special,  is  valid.59  One  of  the  enumerated  cases  in 
which  the  Illinois  constitution  forbids  local  or  special  laws  is  the  case 
of  "laws  granting  to  any  corporation,  association,  or  individual  any 
special  or  exclusive  privilege,  immunity  or  franchise  whatever."  It 
also  provides  that  no  corporation  shall  be  created  by  special  laws, 
except  for  charitable  or  other  specified  purposes.  New  Jersey  has  held 
that  an  act  establishing  a  state  board  of  trustees  of  a  pension  fund  for 
all  public  school  teachers  of  the  state,  with  specified  powers  and  privi- 
leges, is  not,  even  if  it  creates  a  corporation,  a  "special  act  conferring 
corporate  powers/'  and  does  not  grant  "exclusive  privileges,"  because 
it  deals  with  an  entire  subject  and  confers  only  political  rights  and 
duties.00  A  law  establishing  a  pension  fund  for  teachers  of  the  state 
is  not  made  special  by  a  provision  that  it  shall  not  apply  to  teachers  in 
cities  that  already  have  a  pension  fund,  as  there  is  a  difference  in  their 
situation  which  justifies  a  difference  in  treatment.61 

g.     Deductions  from  Salary  for  Pension  Fund 

A  person  who  holds  by  appointment  and  not  by  contract  a  per- 
manent position,  provided  for  by  law,  whether  it  is  an  office  or  not, 
though  entitled  to  salary  accrued  and  due,  at  the  rate  fixed  by  law,  is 
subject  at  any  time  to  having  his  salary  for  the  future  reduced  by 
proper  public  authority.  There  is  no  contract  that  he  will  continue  to 
receive  the  same  salary,  nor  does  his  occupancy  of  the  position  give 

57.  People  v.  Day  (1917),  277  111.  543. 

58.  Clarke  v.  Police  Board  (1898),  123  Cal.  24,  55  P.  576. 

59.  Trustees  v.  Commissioners  of  Lincoln  Park  (1918),  282  111.  348. 
The  Municipal  Employes  Act  of  1911  is  not  invalid  because  it  applies  only 
to  officers  and  employes  of  specified  classes  in  cities  of  over  100,000.    Hughes 
v.  Traeger  (1914),  264  111.  612. 

60.  Allen  v.  Board  of  Education  (1911),  81  N.  J.  Law  135,  79  A.  101, 
affirmed  86  A.  1102. 

61.  Fellows  v.  Connolly  (Mich.  1916),  160  N.  W.  581  (court  divided). 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  269 

him  any  right  in  the  nature  of  property  to  continue  to  receive  it.  A 
reduction  of  his  salary  during  his  term  does  not  impair  the  obligation 
of  contract  nor  deprive  him  of  property  without  due  process  of  law. 
A  legislative  direction  that  a  sum  equal  to  a  percentage  of  his  salary 
be  deducted  and  paid  into  a  pension  fund  is  merely  a  reduction  of 
his  salary  and  the  appropriation  of  an  equivalent  amount  to  the  fund. 
It  does  not  compel  him  to  contribute  to  the  fund  or  take  his  property. 
It  is  therefore  valid,  though  he  has  only  a  contingent  expectation  of 
interest  in  the  fund,  and  may  never  become  entitled  to  a  pension. 

On  these  principles  the  municipal  employes  act  of  1911,  and  the 
county  employes  act  of  1915  were  upheld.62  For  the  same  reasons  the 
deduction  from  salary  is  not  a  tax. 

These  principles  would  not  apply  to  a  deduction  from  a  salary, 
which  salary  had  been  agreed  on  by  a  contract  made  before  the  statute 
took  effect.  The  provision  for  such  a  deduction  would  seem  to  be  void 
as  impairing  the  obligation  of  contract.  But  where  the  deduction  is  to 
be  made  from  salaries  of  persons  employed  after  the  statute  takes 
effect,  it  has  been  held  that  the  contract  of  employment  is  to  be  inter- 
preted, in  view  of  the  statute,  as  really  being  for  a  salary  which  is  less 
'than  the  nominal  sum  by  the  amount  of  the  deduction  provided  for.63 
A  contrary  result  has  been  reached  in  Ohio,  on  the  ground  that  a 
promise  to  pay  a  fixed  sum  is  not  to  be  interpreted  as  a  promise  to 
pay  a  smaller  one,  that  the  deduction  is  consequently  a  special  tax  on 
teachers,  not  justifiable  on  the  ground  they  receive  a  special  benefit, 
since  the  chance  that  the  teacher  taxed  will  continue  to  serve  until 
pensioned  is  small,  and  that  therefore  the  deduction  takes  property  with- 
out due  process  of  law  and  violates  the  requirement  that  taxes  be  im- 
posed by  a  uniform  rule.64 

The  Ohio  view  seems  to  ignore  the  fact  that  a  contract  carries 
only  such  obligation  as  attaches  to  it  by  the  law  in  force  when  it  was 
made,  and  that  by  that  law  the  teachers'  contracts  were  subject  to 
deduction.  If,  however,  an  employe  is  entitled  to  a  given  compensa- 
tion, a  provision  for  a  compulsory  deduction  from  it  is  void  as  a  taking 

62.  Hughes    v.    Traeger    (1914),    264    111.    612;    Helliwell    v.    Sweitzer 
(1917),  278  111.  248;  and  see  People  v.  McClave  (1885),  3  How.  Pr.  (N.  S.) 
8,  affirmed  102  N.  Y.  468,  7  N.  E.  406.  Burke  v.  Board  (1906),  4  Cal.  App. 
235,  87  P.  421. 

63.  Allen  v.  Board  (1911),  81  N.  J.  Law-  135,  79  A.  101,  affirmed  86  A. 
1102.     And  see  Fellows  v.  Connolly  (Mich.  1916),  160  N.  W.  581;  Murphy 
v.  Board  (1903),  87  App.  Div.  277,  84  N.  Y.  Supp.  380  (by-law  for  deduction 
from  salary  for  illness  is  valid  as  to  future  contracts). 

64.  Hubbard  (or  Hibbard)  v.  State  (1901).  65  Ohio  St.  574,  64  N.  E. 
109,  58  L.  R.  A.  654,  affirming  State  v.  Hubbard,  22  Ohio  Cir.  Ct.  252,  12  Ohio 
Cir.  Dec.  87. 


270  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

of  property.  To  this  extent  the  doctrine  of  the  Ohio  court  seems  sound, 
and  upon  that  principle  the  Illinois  Supreme  Court  held  void  the  pro- 
vision of  the  county  employes  act  of  1915,  for  a  compulsory  deduction 
from  salaries,  so  far  as  it  applied  to  the  deputies  and  assistants  who 
by  Section  9  of  Article  X  of  the  constitution  were  entitled  to  receive 
the  compensation  fixed  by  the  county  board.  Those  who  refuse  to 
contribute  voluntarily,  it  seems,  are  not  entitled  to  pensions.65 

II.  POWER  OF  THE  STATE  TO  REQUIRE  MUNICIPALI- 
TIES TO  PAY  PENSIONS  AND  LEVY  TAXES  FOR 
THEM 

The  Supreme  Court  of  Illinois  has  decided  that  the  legislature 
has  power  to  require  municipalities  to  establish  disability,  retiring  and 
death  benefit  pensions  for  policemen  and  to  levy  taxes  to  maintain  the 
pension  funds.66  The  decision  rests  on  the  theory  that  the  prevention 
and  prosecution  of  crime  are  a  concern  of  the  state  and  that  when 
from  motives  of  convenience  the  state  vests  municipalities  with  power 
to  maintain  a  police  force,  it  merely  uses  them  as  a  means  to  discharge 
its  own  function  and  does  not  part  with  power  to  control  the  manner  in 
which  they  execute  the  agency.  It  is  important  to  observe,  as  the  court 
makes  plain,  that  there  may  be  matters  in  regard  to  which  a  munici- 
pality stands  to  the  state  in  much  the  same  relation  that  a  private  indi- 
vidual does,  and  that  as  to  such  matters  its  relations  to  its  employes 
may  be  subject  to  control  only  as  are  the  relations  between  a  private 
person  and  his  employes ;  so  that  the  state's  power  to  compel  a  city  to 
pension  persons  employed  only  in  the  city's  private  concerns  or  to  levy 
taxes  to  pay  the  pensions  is  open  to  doubt,  especially  in  view  of  the 

65.  Helliwell  v.  Sweitzer  (1917),  278  111.  248. 

66.  An   act   for   police   pensions    in   cities   of   9,000    to    50,000,   to   be 
granted  on  specified  conditions,  in  amounts  based  on  police  salaries,  which 
provides  that  in  such  cities  "there  shall  be  set  apart"  specified  items  of  in- 
come, and  that  a  board  "to  be  chosen  as  hereinafter  provided  shall  be  and 
constitute    a   board   of   trustees    to   provide   for   the    disbursement   of   said 
fund,"  makes  mandatory  the  establishment  of  the  fund,  and  the  mayor  may 
in  a  proper  case  be  mandamused  to  appoint  members  who  by  statute  are 
to  be  appointed  by  him.     People  v.  Abbott  (1916),  274  111.  380. 

An  act  which  establishes  a  board  of  pensions  for  park  policemen,  the 
pensions  to  be  granted  on  specified  conditions,  at  rates  based  on  salaries, 
and  requires  the  commissioners  to  levy  a  tax  at  a  rate  sufficient  to  meet 
the  board's  estimate  of  the  fund's  needs,  so  that  the  amount  of  the  tax 
is  controlled  by  the  statute,  and  the  commissioners  have  no  discretion  in 
the  matter,  is  valid;  and  if  the  commissioners  refuse  to  ^make  the  levy  on 
the  ground  that  the  act  is  unconstitutional,  they  are  subject  to  mandamus. 
Trustees  v.  Commissioners  of  Lincoln  Park  (1918),  282  111.  348. 

See  also  Firemen's  Benevolent  Ass.'v.  Lounsbury  (1859),  21  111.  511, 
holding  that  in  the  absence  of  special  constitutional  restriction,  the  legis- 
lature may  provide  relief  for  Chicago  firemen  by  taxing  the  Chicago  agents 
of  foreign  fire  insurance  companies  on  business  done  in  Chicago. 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919  271 

clause  of  Section  10  of  Article  IX  of  the  Illinois  constitution,  which 
reads :  "The  general  assembly  shall  not  impose  taxes  upon  municipal 
corporations,  or  the  inhabitants,  or  property  thereof,  for  corporate 
purposes."  It  is  therefore  important  to  review  the  authorities  and  con- 
siderations which  bear  upon  the  questions,  first,  what  municipal  officers 
or  employes  exercise  a  delegated  state  function,  so  that  the  state  may 
require  the  municipality  to  pension  them  under  the  doctrine  of  the 
police  cases,  and,  secondly,  whether  a  different  decision  should  be 
reached  as  to  other  municipal  officers  or  employes,  either  upon  general 
constitutional  principles  or  under  the  particular  provisions  of  the  con- 
stitution of  Illinois.  These  questions  are  somewhat  complex  and  diffi- 
cult. 

Counties,  townships,  school  districts,  boards  of  education,  and 
similar  bodies,  which  because  of  the  limited  number  of  their  corporate 
powers  are  sometimes  called  quasi-corporations,  are  essentially  local 
agencies  created  for  the  local  performance  of  state  functions.67  It 
seems  clear  that  upon  the  principle  of  the  police  cases,  the  legislature 
may  require  these  municipalities  to  establish  pension  systems  for  sub- 
stantially all  of  their  officers  or  employes  of  whatever  class,  and  to 
exercise  for  their  support  whatever  powers  of  taxation  they  may  con- 
stitutionally possess.  If  a  board  of  education  or  school  district  in 
maintaining-  schools  acts  as  an  agency  of  the  state,  so  that  the  state 
can  direct  the  manner  in  which  it  carries  out  the  work  by  requiring  it 
to  establish  a  pension  fund,  the  same  thing  is  true  of  a  city  to  which 
the  state  may  entrust  the  conduct  of  schools  instead  of  establishing 
a  school  district.  In  this,  as  in  maintaining  a  police  force,  the  city  acts 
as  a  governmental  subdivision  of  the  state.67a 


67.  Dillon,  Mun.  Corps.  Sec.  37;  Bush  v.  Shipman  (1843),  5  111.  186, 
190;  Dennis  v.  Maynard  (1854),  15  111.  477,  480;  Sangamon  Co.  v.  Springfield 
(1872),  63  111.  66,  71;  Supervisors  of  Will  Co.  v.  People  (1884),  110  111.  511; 
Heffner  v.  Cass  Co.  (1901),  193  111.  439,  448,  449,  452  (overruled  in  People 
v.  Block,  276  111.  286  on  another  point);  People  v.  Bowman  (1910),  247  111. 
276,  286.  In  Kinnare  v.  Chicago  (1898),  171  111.  332,  334,  it  was  held  that 
the  board  of  education  was  not  liable  for  personal  injuries  caused  by  the 
negligence  of  its  employes  in  building  a  school  house.  Boggs,  J.,  said: 
"It  therefore  appears  the  appellee  board  is  a  corporation  or  quasi-corpora- 
tion  appointed,  nolens  volens,  by  the  general  law  of  the  state  to  aid  in 
the  administration  of  the  state  government,  and  charged,  as  such,  with 
duties  purely  governmental  in  character,  *  *  *  It  owns  no  property,  has 
no  private  corporate  interests,-  and  derives  no  special  benefit  from  its  cor- 
porate acts.  It  is  simply  an  agency  of  the  state,  having  existence  for  the 
sole  purpose  of  performing  certain  duties  deemed  necessary  to  the  main- 
tenance of  an  efficient  system  of  free  schools  within  the  particular  locality 
in  its  jurisdiction." 

67a.  It  has  been  held  in  Ohio  that  a  teachers'  pension  law  dealt  with 
a  subject  of  general  nature,  and  that  a  provision  of  the  state  constitution 
that  all  laws  of  a  general  nature  should  have  a  uniform  operation  through- 
out the  state  rendered  it  invalid  if  confined  without  reason  to  a  particular 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

In  considering  in  what  other  respects  a  city  acts  as  agent  for  the 
state,  it  is  useful  to  refer  to  decisions  concerning  the  city's  liability  to 
persons  injured  by  the  misconduct  of  its  employes.  As  to  wrongs, com- 
mitted in  the  discharge  of  its  functions,  the  city  partakes  of  the 
immunity  from  liability  for  torts  of  agents  which  the  state  enjoys. 
The  ground  of  exemption  "is  that  in  those  matters  the  city  acts  only 
as  agent  of  the  state,  in  the  discharge  of  duties  imposed  by  law  for  the 
promotion  and  preservation  of  the  public  and  general  welfare,  as  con- 
tra-distinguished from  mere  corporate  acts,  having  relation  to  the 
management  of  its  corporate  or  private  concerns,  and  from  which  it 
derives  some  special  or  immediate  advantage  or  emolument  in  its  cor- 
porate or  private  character/'68  On  this  principle  a  city  is  not  liable 
for  the  negligence  of  firemen,69  of  nurses  in  a  city  hospital,  maintained 
to  cure  and  prevent  the  spread  of  disease,70  or  for  the  negligent  man- 
agement of  a  city  jail,  whereby  small  pox  is  spread.71  There  can  be  no 
doubt  that  employes  of  these  classes  fall  within  the  principle  of  the 
police  cases,  and  that  the  legislature  may  require  cities  to  establish 
pension  funds  for  them.72  The  same  considerations  apply  to  those 
employes  of  municipal  water  works  and  sewer  departments  whose 
duties  are  connected  with  the  maintenance  of  protection  against  fire  or 
with  the  promotion  of  health.  In  Normal  School  v.  Charleston,73 
Cartwright,  J.,  said :  "In  the  creation  of  a  system  of  water  works  and 
the  operation  of  the  same  for  the  purpose  of  protection  against  fire, 
flushing  sewers,  or  other  uses  pertaining  to  the  public  health  and 
safety,  the  city  is  in  the  exercise  of  the  police  power  and  is  therefore 
exercising  a  governmental  function." 

The  maintenance  of  highways  is  a  state  function,  and  hence  it 
would  seem  that  employes  engaged  in  the  care  of  city  streets  are,  like 

city.  The  court  pointed  out  that  common  schools  are  public  institutions  of 
the  state,  of  interest  to  all,  that  the  advantages  of  teachers'  pensions  are 
not  of  a  local  character,  but,  because  related  to  the  efficiency  of  schools, 
would  be  realized  in  whatever  localities  the  law  was  applicable  (State  v. 
Hubbard  (1901),  22  Ohio  Cir.  Ct.  Rep.  252,  12  Ohio  Cir.  Dec.  87,  affirmed 
in  65  Ohio  St.  574,  64  N.  E.  109,  58  L.  R.  A.  564;  State  v.  Kurtz  (1901),  21 
Ohio  Cir.  Ct.  Rep.  261,  11  Ohio  Cir.  Dec.  705).  In  Dakota  a  statute  for 
teachers'  pensions  was  sustained  which  compelled  each  county  to  pay  into 
the  state  fund  ten  cents  for  each  child  of  school  age  in  the  county,  and  a 
percentage  of  teachers'  salaries.  State  v.  Hauge  (1917),  37  N.  D.  583,  164 
N.  W.  289. 

68.  Bailey,  J.,  in  Culver  v.  Streator  (1889),  130  111.  238. 

69.  Wilcox  v.  Chicago  (1883),  107  111.  334;  Culver  v.  Streator  (1889), 
130  111.  238;  Chicago  v.  Selz,  Schwab  &  Co.  (1903),  202  111.  545,  550. 

70.  Tollefson  v.  Ottawa  (1907),  228  111.  134. 

71.  Evans  v.  Kankakee  (1907),  231   111.  223. 

72.  The  legislature  may  compel  a  city  to  pension  superannuated  fire- 
men and  to  tax  for  the  purpose.     State  v.  Love   (1911),  89  Neb.   149,   131 
N.  W.  196,  34  L.  R.  A.  (N.  S.)  607. 

73.  (1916)  271  111.  602,  605. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  273 

policemen,  persons  whose  efficiency  the  state  may  secure  by  requiring 
cities  to  establish  pensions  for  them.  In  many  states  the  city  is,  upon 
this  principle,  not  liable  for  their  negligence.  In  Illinois,  a  city  is  liable 
for  negligent  defects  in  the  streets,  but  the  reason  is  not  that  the  city  is 
considered  to  be  acting  in  a  private  and  not  in  a  governmental  capacity. 
The  Illinois  view  is  that  in  accepting  the  privileges  conferred  on  them 
by  their  charters,  cities  impliedly  assume  a  responsibility  toward  those 
who  use  the  streets  for  their  safe  condition,  like  that  which  rests  on 
land  owners  in  general.  The  private  interest  involved  is  rather  that 
of  the  persons  who  use  the  streets.74  For  officers  and  employes  of  the 
above  classes,  it  would  seem,  under  the  Illinois  decisions,  that  the 
legislature  could  require  municipalities  to  establish  pension  funds  and 
to  tax  for  their  support.  The  question  remains  as  to  other  officers  and 
employes. 

There  is  a  theory  that  a  right  to  local  self  government  lies  at  the 
basis  of  our  political  institutions,  so  that  when  a  state  constitution 
provides  for  the  establishment  of  local  municipal  governments,  there 
is  an  implication  that  municipalities  are  to  be  free  from  control  by 
the  state  in  matters  of  "local  concern."  This  theory  is  supported  by 
the  high  authority  of  Judge  Cooley,  and  has  been  received  with  favor 
in  the  courts  of  Indiana,  Kentucky,  Michigan,  Montana  and  Nebraska.75 
By  the  weight  of  authority,  however,  there  is  no  sufficient  ground  to 
infer  intent  to  exempt  the  people  of  a  municipality,  or  the  municipality 
itself,  in  any  degree  from  the  ordinary  governmental  control  of  the 
state.  Judge  Dillon  says :  "The  people  are  the  recognized  source  of  all 
authority,  state  and  national,  and  to  this  authority  it  must  come  at 
last,  whether  immediately  or  by  a  circuitous  process.  An  elected  mayor 
or  an  appointed  mayor  derives  his  authority  to  act  from  the  same 
source,  viz.,  that  of  the  legislature.  It  is  not  necessary  to  a  municipal 
government  that  the  officers  should  be  elected  by  the  people.  Local 
self  government  is  undoubtedly  desirable  where  there  are  not  forcible 
reasons  against  its  exercise.  But  it  is  not  required  by  any  inexorable 
principle.  These  views  have  been  adopted  as  judicially  sound  in  most 

74.  See  Kinnare  v.  Chicago  (1898),  171  111.  332,  336.     It  has  been  held 
that  the  liability  extends  to  the  negligent  management  of  a  swinging  bridge 
whereby  it  was  made  an  instrument  of  damage  (Guthman  v.  Chicago  (1908), 
236  111.  9;   Lehigh  Valley  Trans.  Co.  v.  Chicago   (1909),  237  111.  581),  but 
not,  it  is  believed,  to  a  case  where  the  highway  remained  in  safe  condition, 
and  the  injury  was  due  solely  to  the  negligent  acts  of  an  employe  working 
upon  it,  as  in  using  his  tools. 

75.  People  v.  Hurlburt  (1871),  24  Mich.  44;  Evansville  v.  State  (1889), 
118  Ind.  426,  21  N.  E.  267,  4  L.  R.  A.  93;  Lexington  v.  Thompson  (1902), 
113  Ky.  540,  68  S.  W.  477;  McDonald  v.  Louisville  (1902),  24  Ky.  L.  Rep. 
271,  68  S.  W.  413;  State  v.  Edwards  (1910),  42  Mont.  135,  111  P.  734;  Cooley, 
Const.  Lims.  (7th  ed.)  335;  Cooley,  Taxation,  Chap.  21. 


274  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

courts  that  have  had  occasion  to  consider  the  question/'76  In  Ward 
v.  Field  Museum,77  Cartwright,  J.,  said,  for  the  court:  "The  city  of 
Chicago,  to  the  extent  of  the  jurisdiction  delegated  to  it  by  its  charter, 
is  but  an  effluence  from  the  sovereignty  of  Illinois,  governs  for  Illi- 
nois, and  its  authorized  legislation  and  local  administration  of  law  are 
legislation  and  local  administration  by  Illinois  through  the  agency  of 
that  municipality." 

Yet  even  if  it  is  true  that  a  city  possesses,  in  the  absence  of  special 
constitutional  provisions,  no  implied  right  of  local  self  government,  but 
as  to  all  its  governmental  policies  is  subject  to  the  direction  and  control 
of  the  state,  it  is  also  true  that  the  city  and  the  state  are  not  the  same, 
but  separate,  entities.  The  property  of  the  city  is  the  property  of  its 
citizens  in  their  collective  capacity  and  is  not  the  property  of  the  state. 
The  state  cannot  take  it  and  devote  it  to  the  use  of  others.  And  action 
of  the  city  which  affects  its  property  interests  solely  and  does  not  affect 
the  character  or  efficiency  of  its  government,  or  the  safety  or  con- 
venience of  its  citizens,  may  well  be  beyond  the  state's  control,  except 
so  far  as  it  could  control  similar  acts  of  private  corporations.  If  the 
state  cannot  appropriate  a  thousand  dollars  from  the  city  treasury  for 
other  than  city  uses,  it  can  hardly  require  the  city  to  pay  a  thousand 
dollars  for  a  carpet  in  the  city  hall,  if  the  city  can  buy  the  same  carpet 
for  less. 

It  is  difficult  exactly  to  define  the  extent  to  which  this  principle 
limits  the  state's  power.  It  seems  clear  that  the  state  can  require  cities 
to  provide  pensions  for  most  city  officers  on  the  simple  ground  that  it 
is  tantamount  to  a  regulation  of  their  compensation.  Judge  Dillon 
says  :78  "The  power  of  the  legislature  to  prescribe  the  qualifications, 
hours  of  attendance,  and  the  compensation  of  municipal  officers  is 
undoubted.  It  would  not  seriously  be  contended  that  the  legislature 
could  not  fix  the  compensation  of  the  mayor,  commissioners  of  police, 
city  treasurer  or  comptroller,  nor  can  there  be  any  doubt  but  that  the 
legislature  may  prescribe  the  compensation  to  be  paid  to  minor  officers 
of  the  city,  engaged  in  the  performance  of  functions  relating  to  police, 
health,  and  public  safety." 


76.  Dillon,  Mimic.  Corps.  (5th  ed.)  Sec.  98. 

77.  (1909)   241   111.  496,  at  508.     See   further   Chicago  v.   Cement  Co. 
(1899),  178  111.  372,  380;  People  v.  Bowman  (1910),  247  111.  276,  286,  and  the 
cases  cited  under  note  67  sup.;  New  Orleans  v.  Clark  (1877),  95  U.  S.  644; 
Brewer,  J.,  in  Williams  v.  Eggleston  (1898),  170  U.  S.  304;  Denio,  C.  J.,  in 
Darlington  v.   N.   Y.    (1865),   31    N.   Y.    164;   Sinton   v.   Ashbury    (1871),  41 
Cal.  525;  State  v.  Williams  (1896),  68  Conn.  131,  35  A.  24,  421,  48  L.  R.  A. 
465   and   note;    Opinion   of  Justices    (1900),    175    Mass.   599,   57   N.   E.   675; 
Ryan  v.  N.  Y.  (1904),  177  N.  Y.  271,  69  N.  E.  599;  Borgis  v.  Falk  (1911), 
147  Wis.  327,  133  N.  W.  209. 

78.  Dillon,  Munic.  Corps.   (5th  ed.),  Sec.   118. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  275 

He  continues:  "But  when  officers  of  this  class  have  been  elimi- 
nated, there  remain  a  great  number  of  persons  employed  by  a  city  and 
drawing  compensation  from  its  treasury,  whose  only  claim  to  payment 
is  that  they  are  mechanics  or  laborers  rendering  services  as  such  to  the 
city." 

The  question  arises  how  far  the  legislature  can  control  the  com- 
pensation of  these  employes.  There  is  a  conflict  of  authority  as  to  the 
extent  of  the  state's  control  over  the  terms  of  employment  of  city 
workmen.  It  has  been  held  that  the  state  by  virtue  of  its  general  right 
to  control  the  acts  of  a  city,  and  of  the  public  concern  in  the  just  and 
beneficent  conduct  of  all  city  affairs,  may  require  cities  to  establish 
an  eight-hour  day  for  city  work,79  or  to  pay  current  wages.80  There 
is  no  reason  to  doubt  that  in  states  where  this  is  law  the  legislature 
could  require  cities  to  establish  workmen's  pensions.  The  Illinois 
Supreme  Court  seems  to  be  of  a  different  opinion  as  to  power  to  reg- 
ulate hours  of  work  and  wages,  but  on  a  ground  in  no  wise  inconsist- 
ent with  the  doctrine  of  a  general  legislative  control  over  city  affairs. 
It  considers  that  a  municipal  corporation,  whether  a  county  or  a  city, 
and  if  a  city,  whether  acting  in  its  governmental  or  in  its  proprietary 
capacity,  holds  its  funds  as  a  quasi  trustee  for  the  taxpayers  to  apply 
them  for  their  benefit  to  the  purposes  for  which  they  were  raised.  Any 
command  of  the  legislature  to  apply  the  funds  for  the  benefit  of  pri- 
vate persons  would  be  void  as  a  taking  of  property  without  due  process 
of  law,  if  a  similar  command  to  private  employers  would  be.  So  of  a 
command  to  employ  only  union  laborers,  or  to  employ  workmen  for 
less  than  the  usual  working  day,  which  is  "of  such  a  nature  as  to 
restrict  competition  and  to  increase  the  cost  of  the  work."81  "Any 
statute  which  results  in  paying  to  him  (the  laborer)  more  than  others 
pay  for  the  same  or  like  services  imposes  an  increased  burden  upon 
the  tax-payer,  and  diverts  to  the  use  of  a  private  individual  money 
raised  by  taxation,  which  by  right  cdn  only  be  applied  to  a  municipal 
and  public  purpose."82  In  other  respects  the  legislature's  power  to  con- 
trol the  manner  in  which  city  affairs  shall  be  conducted  is  broad. 
Though  a  city  owns  land  which  forms  a  boulevard  or  park,  the  state 
may  control  its  use  even  to  the  point  of  putting  it  under  the  manage- 

79.  State  v.  Atkin  (1902),  64  Kans.  174,  67  P.  519,  s.  c.  Atkin  v.  Kansas 
(1903),  191  U.  S.  207;  McNulty  v.  N.  Y.  (1901),  168  N.  Y.  117;  61  N.  E.  111. 

80.  Ryan  v.  N.  Y.  (1904),  177  N.  Y.  271,  69  N.  E.  599. 

81.  Adams  v.  Brenan  (1898),  177  111.  194,  199. 

82.  Dillon,  Munic.  Corps.,  Sec.   118. 


276  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

ment  of  commissioners  elected  by  the  voters  of  a  self-formed  park  dis- 
trict which  does  not  include  the  whole  city.83 

Perhaps  it  is  correct  to  say  that  in  Illinois  a  municipal  corporation 
stands  to  the  state  as  a  private  individual  does  in  respect  to  state  reg- 
ulations which  directly  affect  the  municipal  property,  and  do  not  affect 
its  governmental  relations  to  the  people,  taken  in  the  largest  sense  as 
including  all  provisions  for  the  people's  convenience,  comfort  or  social 
betterment,  and  also  as  including  measures  affecting  the  fitness  or 
efficiency  of  the  municipality  itself  as  an  instrument  for  promoting 
the  public  interests  in  those  respects.  So  that  a  regulation  affecting 
city  property  interests  alone,  if  it  would  be  void  as  to  an  individual, 
is  void  as  to  a  municipality.  For  this  reason  it  is  probable  that  there 
can  be  no  requirement  restricting  to  the  employment  of  union  laborers 
persons  who  contract  with  the  board  of  education  to  build  school 
buildings  or  who  contract  for  city  printing,84  or  for  city  buildings;85 
and  that  there  can  be  no  requirement  limiting  contractors  on  city  build- 
ings,86 or,  it  seems,  on  sewers,87  to  eight-hour  working  days.  But 
assuming  that  if  the  state  cannot  restrict  a  private  employer,  it  cannot 
restrict  a  city,  as  to  the  workmen  it  may  employ  or  as  to  the  hours  it 
may  keep  them  at  work,  since  the  restriction  would  produce  public 
expense  for  private  benefit;  it  does  not  follow  that  a  state  may  not 
require  a  city  to  provide  pensions  for  its  workmen,  unless  it  can  require 
private  employers  to  do  so.88  The  same  reason  would  prevent  the 
state  limiting  a  city  to  the  employment  of  policemen  who  were  members 
of  a  policemen's  union,  yet  the  state  may  require  a  city  to  pension 
policemen.  As  has  been  said,  it  is  only  because  pensions  tend  to  improve 
service  that  a  city  is  justified  in  spending  public  money  on  them.  But 
as  to  all  the  activities  of  a  city,  its  inhabitants  have  an  interest  that  they 

83.  People  v.  Mayor   (1869),  51   111.   17;   People  v.  Walsh   (1880),  96 
111.  232.     In  some  states  it  has  been  held  that  the  state  may  take  from  a 
city  the  management  of  water  works  which  the  city  owns  and  entrust  them 
to  other  officers.     David  v.  Portland  Water  Committee  (1886),  14  Ore.  98; 
Coyle  v.  Mclntyre  (Del.  1884),  7  Houst.  44. 

84.  Adams  v.  Brenan  (1898),  177  111.  318  (the  board  has  no  power  in 
absence  of  statute). 

85.  Holden  v.  Alton  (1899), '179  111.  318  (city  ordinance  invalid). 

86.  Fiske  v.  People  (1900),  188  111.  206  (ordinance  held  to  be  beyond 
the  power  of  the  city  and  said  to  be  beyond  the  power  of  the  state). 

87.  McChesney  v.  People   (1902),  200  111.   146. 

88.  By  weight  of  authority  employers  may  be  required  to  compensate 
their   workmen  for,   or  to  insure   them  against,  accidental   injuries.     N.   Y. 
Central   R.   Co.  v.  White    (1917),  243  U.   S.   188;   Mountain  Timber   Co.  v. 
Washington  (1917),  243  U.  S.  219;  Jensen  v.  So.  Pac.  Co.  (1915),  215  N.  Y. 
514,  109  N.  E.  600,  L.  R.  A.  1916A,  403;  Western  Indemnity  Co.  v.  Pillsbury 
(1915),    170  Cal.  686,    151    P.  398;   Cunningham  v.    Northwestern   Imp.    Co. 
(1911),  44  Mont.   180,   119  P.  554.     If  so,  a  city  could  be  required  to  give 
similar  compensation,  that  is  to  provide   disability  and  death  benefit  pen- 
sions, so  far  as  concerns  injuries  received  in  the  course  of  employment. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  277 

be  executed  efficiently,  and  this  interest  is  quite  distinct  from  their 
"proprietary"  interest  that  they  be  executed  cheaply.  Even  outside  of 
functions  in  a  special  sense  "governmental,"  it  is  only  matters  of  public 
interest  with  which  cities  concern  themselves.  They  do  not  engage  in 
the  jewelry  business  or  sell  automobiles.  They  do  not  spend  money 
on  water  works  or  a  lighting  system  for  the  sake  of  spending  it,  but 
to  promote  a  local  public  interest.  It  is  to  serve  the  local  public  inter- 
ests of  its  inhabitants  that  the  state  endows  a  city  with  control  over 
city  affairs.  Those  affairs  the  state  might  have  continued  to  control 
in  all  respects  itself.  The  powers  of  the  city  government  and  the  meth- 
ods by  which  it  shall  exercise  them  are  for  the  state  to  determine.  To 
provide  appropriate  methods  of  city  administration  is  essential  to  the 
protection  of  the  interests  of  the  inhabitants.  For  the  state  to  direct  a 
city  how  it  shall  carry  on  its  affairs  is  not  to  dictate  to  it  what  it  shall 
do.  It  is  not  inconsistent  with  the  strict  theory  of  local  self  govern- 
ment. A  city  which  is  simply  required  to  establish  a  pension  fund  for 
its  employes  is  left  free  to  have  as  many  employes  as  it  pleases,  or  as 
few,  and  to  employ  them  in  any  municipal  work  it  sees  fit.  If  the 
state  can  forbid  the  use  in  municipal  administration  of  methods  it 
thinks  wasteful  and  incompetent,  cannot  it  require  the  adoption  of 
methods  it  thinks  essential  to  securing  the  best  service  and  establishing 
the  best  relations  between  the  city  and  those  who  serve  it,  to  the  end 
that  the  city  may  better  fulfill  the  purposes  for  which  the  state  created 
it?  Decisions  in  Wisconsin  and  in  Michigan  (in  which  latter  state  the 
theory  of  a  constitutional  right  to  local  self-government  prevails)  to 
the  effect  that  the  state  may  require  a  city  to  compensate  its  workmen 
for  accidental  injuries,  irrespective  of  its  power  to  enact  a  compulsory 
compensation  law  for  private  employers,  seem  to  justify  the  foregoing 
remarks  and  to  be  authority  for  the  proposition  that  the  state's  power 
to  control  cities  as  its  governmental  agencies  extends  to  the  control 
in  the  public  interest  of  the  cities'  relations  with  all  their  officers  and 
employes,  whether  engaged  in  the  discharge  of  their  so-called  govern- 
mental functions  or  of  those  functions  sometimes  distinguished  as 
private  or  proprietary. 

In  Borgis  v.  Falk,89  in  answer  to  a  suggestion  that  a  workmen's 
compensation  act,  optional  as  to  private  employers,  was  void  because 
compulsory  as  to  municipalities,  since  it  subjected  them  and  their  tax- 
payers to  increased  expense  in  a  matter  of  local  concern,  Winslow, 
C.  J.,  said :  "We  shall  only  say  that  the  manner  in  which  the'  state 
or  public  shall  treat  its  workmen  is  peculiarly  a  matter  for  the  legis- 

89.     (1911)  147  Wis.  327,  133  N.  W.  209. 


278  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

lature  to  determine.  *  *  *  We  know  of  no  reason  why  the  public, 
acting  by  its  law-making  power,  may  not  provide  that  its  employes 
shall  have  as  part  of  their  compensation  certain  indemnities  in  case  of 
accidental  injuries  in  the  public  service.  When  the  law  does  so  provide, 
the  raising  of  funds  to  discharge  those  indemnities  becomes  plainly  a 
proper  public  purpose." 

In  \Vood  v.  City  of  Detroit,90  the  power  of  the  legislature  to  com- 
pel cities  to  compensate  their  workmen  accidentally  injured  was  directly 
in  question;  Ostrander,  J.,  said,  for  the  court:  "The  distinction 
between  powers  governmental  in  character  and  those  private  in  char- 
acter, as  exercised  by  municipal  corporations,  does  not  involve  the 
abrogation  of  the  distinction  between  private  municipal  activity  and 
private  individual  activity.  To  employ  a  seeming  paradox,  private 
municipal  activities  are  all  of  them  public.  *  *  *  There  is  not  and 
there  cannot  be,  any  merely  local  power  to  tax  persons  or  property. 
*  *  *  Moreover,  municipal  corporations  are  still  state  agencies,  and 
as  such  subject  to  state  direction  and  control,  none  the  less  so  because 
the  exercise  of  such  control  may  indirectly  affect  a  private  municipal 
activity.  The  act  in  its  application  to  municipalities  involves  no  right 
of  local  self  government  and  management  of  corporate  property.  It 
deprives  the  municipality  of  none  of  its  property,  because,  in  effect,  it 
is  made  lawful  to  raise  by  tax  the  money  required  to  pay  all  injured 
employes  some  compensation.  A  new  public  purpose  for  which  taxes 
may  be  levied  is  declared.  The  subject  of  the  legislation  which  is  in 
question  here  is  a  social  subject  in  its  very  nature  referable  for  com- 
munity action  to  the  state  itself." 

It  remains  to  consider  the  effect  of  special  provisions  in  the 
Illinois  constitution  upon  state  control  over  municipal  pensions.  The 
constitution  of  1848  empowered  the  legislature  to  vest  the  corporate 
authorities  of  counties,  townships,  school  districts,  cities,  towns  and 
villages  with  power  to  tax  for  corporate  purposes.  This  implied  that 
the  legislature  could  not  delegate  power  to  tax  to  any  other  persons 
or  bodies,  and  accordingly  it  was  held  that  an  attempt  to  confer  on 
park  commissioners  power  to  require  a  city  to  tax  for  a  park  was  bad 
if  the  commissioners  were  not  authorities  of  the  city,91  but  good  if 
they  were  elected  authorities  of  the  city.92  This  distinction  has  been 
enforced  several  times.93  The  constitution  of  1870  retained  the  pro- 
vision that  the  legislature  might  delegate  to  a  municipal  corporation 

90.  (1915)  188  Mich.  547,  155  N.  W.  592. 

91.  People  v.  Mayor  (1869),  51  111.  17. 

92.  People  v.  Salomon  (1869),  54  111.  39. 

93.  Harward  v.  St.  Clair  Drainage  Co.  (1869),  51  111.  130;  Lovingston 
v.  Wider  (1870),  53  111.  302. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  279 

• 

(and  to  none  other)94  power  to  tax  for  its  corporate  purposes,  and 
coupled  with  it  a  new  provision  prohibiting  the  legislature  itself  from 
imposing  taxes  for  corporate  purposes  on  municipal  corporations, 
their  inhabitants  or  property,  but  directing  it  to  require  municipalities 
to  levy  taxes  to  pay  their  debts. 

The  reason  for  adding  the  new  clause  is  perhaps  to  be  found  in 
the  fact  that  question  had  arisen  as  to  the  effect  of  the  former  clause 
on  the  power  of  the  legislature  itself  to  levy  municipal  taxes.  In  Har- 
ward  v.  St.  Clair  Drainage  Co.,95  the  Supreme  Court  had  declined  to 
express  an  opinion  as  to  the  legislature's  power  "directly  to  impose  a 
corporate  tax  for  a  corporate  purpose."  And  in  People  v.  Mayor,96 
the  court,  through  Chief  Justice  Breese,  said,  in  effect,  that  even  if 
the  clause  did  mean  that  the  legislature  must  not  itself  levy  taxes  pay- 
able into  the  city  treasury,  yet  if  a  city  did  not  perform  its  work 
properly,  as  if  it  failed  to  maintain  a  satisfactory  police  force,  or  to 
quell  an  insurrection,  the  state  itself  might  step  in  and  do  the  work, 
and  levy  on  the  people  of  the  city  a  tax  for  the  cost,  to  be  paid  into 
the  state  treasury. 

The  new  provision  was  perhaps  intended  to  set  at  rest  the  doubt 
and  to  make  it  plain  that  the  legislature  must  not  itself  lay  taxes  pay-- 
able to  the  city  for  work  done  by  the  city,  at  least  if  the  work  related 
to  the  private  rather  than  the  governmental  functions  of  the  city. 
Similar  clauses  in  the  constitutions  of  other  states  have  been  so  con- 
strued.07 It  seems  never  to  have  been  decided  in  Illinois  that  this 
clause  affects  the  legislature's  power  to  require  cities  to  lay  taxes. 

It  is  left  to  consider  whether  the  mere  specification  that  the  legis- 
lature may  vest  municipalities  with  power  to  tax  for  corporate  pur- 
poses cuts  down  the  power  over  municipal  taxation  which  consistently 
with  general  principles  the  state  would  otherwise  have  had.  The  com- 
pulsory police  pension  cases  decide  that  it  does  not  do  so  as  to  such 
corporate  purposes  as  are  delegated  state  functions.  The  language 
makes  no  distinction  between  governmental  and  private  corporate  pur- 
poses and  no  such  distinction  is  required  to  give  it  significance  and 
effect.  In  Givens  v.  Chicago,98  it  was  held  that  the  state  could  require 
a  city  to  grade  and  curb  streets  and  levy  a  tax  or  assessment  for  the 
cost,  on  recommendation  of  a  board  of  local  improvement  which  was 

94.  Updike  v.  Wright  (1876),  81  111.  49,  53. 

95.  (1869)  51  111.  130,  134. 

96.  (1869)  51  111.  17,  30. 

97.  San  Francisco  v.  Liverpool  Ins.  Co.  (1887),  74  Cal.  113,  15  P.  380; 
State  v.  Wheeler  (1891),  33  Neb.  563,  50  N.  Wr.  770.     But  see,  State  v.  Love 
(1911),  89  Neb.  149,  131  N.  W.  196,  34  L.  R.  A.  (N.  S.)  607;  McDonald  v. 
Louisville  (1902),  24  Ky.  L.  R.  271,  68  S.  W.  413. 

98.  (1900)   188  111.  348. 

19 


.'80  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

not  an  authority  of  the  city.  Some  expressions  in  earlier  cases  may 
have  arisen  from  a  hasty  inference  drawn  from  the  remarks  of  Chief 
Justice  Breese  referred  to  above.  The  distinction  he  drew  was  between 
work  done  by  the  state  and  work  done  by  the  city.  It  was  not  a  dis- 
tinction between  different  kinds  of  work  done  by  the  city.  Where 
Illinois  statutes  have  been  held  void  for  imposing  financial  burdens  on 
municipalities,  it  is  believed  that  they  will  be  found  to  have  amounted 
to  an  unwarrantable  taking  of  the  taxpayers'  money.  Power  to  com- 
pel a  town  to  support  paupers  is  not  power  to  compel  it  to  issue  bonds 
to  the  paupers  which  they  may  sell  to  secure  the  means  of  support,  and 
the  cases  which  hold  that  the  state  cannot  compel  a  city  to  issue  bonds 
in  aid  of  a  railway,"  are  not  inconsistent  with  the  proposition  that  it 
may  require  a  city  to  make  highways  of  its  own.100 

There  seems  to  be  nothing  in  the  Illinois  decisions  to  require  a 
holding  that  the  clauses  of  the  constitution  referring  to  taxation  for 
corporate  purposes  take  away  any  power  which  the  state  would  other- 
wise possess  to  require  municipalities  to  establish  pension  funds  and  to 
levy  taxes  for  their  support. 

III.     POWER  OF  MUNICIPALITIES  TO  GRANT  PENSIONS 

The  grant  of  pensions  is  usually  made  under  express  authority 
from  the  legislature.  Few  cases  have  been  found  involving  a  munici- 
pality's power  to  grant  pensions  without  express  authority.  In  a 
Canadian  case,101  a  city  council  passed  a  resolution  that  "an  indemnity 
of  $1000  shall  be  paid  to  the  heirs  of  firemen  killed  in  the  performance 
of  their  duties."  This  was  held  to  be  a  valid  by-law,  binding  the  city, 
being  authorized  by  the  clause  in  the  city  charter  which  gave  power 
to  make  by-laws  for  its  peace,  order,  good  government  and  general 
welfare,  as  well  as  by  a  clause  which  gave  power  to  make  by-laws  for 
hiring  firemen.  But  in  a  Minnesota  case,102  it  was  held  that  a  board  of 
education,  authorized  to  control  and  manage  the  schools  of  a  city  and 
to  levy  taxes  for  school  purposes,  was  not  thereby  authorized  to  devote 
money  so  raised  to  a  teachers'  pension  fund,  nor  to  hire  only  such 
teachers  as  would  agree  to  contribute  to  the  fund.103 


99.  Marshall  v.  Silliman   (1871),  61   111.  218;   Cairo  R.   Co.  v.   Sparta 
(1875),  77  111.  505;  Gaddis  v.  Richland  Co.   (1879),  92  111.  119;  Choisser  v. 
People  (1892),  140  111.  21,  42. 

100.  See  People  v.  Block  (1916),  276  111.  286. 

101.  Enright  v.  Montreal  (1909),  37  Quebec  Superior  Court,  448. 

102.  State  v.  Rogers  (1901),  87  Minn.  130,  91  N.  W.  430,  58  L.R.A.  663. 

103.  Policemen's   and    firemen's    pension   acts    authorized    Chicago   to 
levy  taxes  not  to  exceed  seven  tenths  and  three  tenths  mills  for  the  respec- 
tive  funds.     The  city  appropriated  to  the  funds  "the   amount  provided  to 
be  levied."     The  appropriation  was  held  void  for  indefiniteness,  and  levies 
thereunder  of  $700,000  and  of  $300,000  were  held  invalid.     People  v.  Arnold 
Bros.  (1918),  282  111.  305. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  281 

IV.     PENSIONS  AS  PROPERTY 

a.     Pensions  Distinguished  from  Gratuities 

A  grant  of  a  right  to  receive  at  stated  intervals  a  certain  sum  of 
money  may  be  so  made  as  to  vest  in  the  grantee  a  property  right,  as  in 
the  case  of  an  annuity  granted  under  seal,  or  so  as  to  confer  a  contract 
right,  as  in  an  ordinary  contract  of  benefit  insurance.  It  is  possible 
for  a  government  in  granting  a  right  to  receive  money  to  adopt  either 
method,  but  it  cannot  then  revoke  the  right  without,  in  the  one  case 
confiscating  property,  and  in  the  other  impairing  the  obligation  of  con- 
tract.104 But  although  a  bounty  promised  on  a  consideration  which 
has  been  performed  is  irrevocable,  it  is  presumably  not  the  intent  of  a 
government  which  grants  or  provides  for  the  future  grant  of  pensions 
to  confer  an  irrevocable  right,  or  to  promise  that  the  pensions  will  con- 
tinue to  be  paid.  This  is  true  even  where  the  expecting  beneficiaries  vol- 
untarily contribute  to  the  fund.105  Money  actually  paid  becomes,  of 
course,  the  property  of  the  pensioner,  and  he  may  have  a  right  to  receive 
installments  already  payable  of  which  he  cannot  be  deprived,  but  as  to 
installments  of  pension  money  that  are  to  become  payable  in  future, 
his  position  as  possessor  of  a  pension  is  like  that  of  a  tenant  at  will ; 
the  right  which  the  state  has  conferred  on  him  is  subject  to  being 
revoked  by  the  state  at  pleasure,  by  repeal  or  modification  of  the  law 
under  which  it  was  granted.  In  other  words,  a  pension  is  ordinarily  a 
revocable  right,  which  the  state  confers,  not  by  way  of  contract  or  of 
permanent  grant,  but  as  a  deserved  gratuity,  to  be  continued  so  long 

104.  Where  the  legislature  has  contracted  with  an  officer  to  pay  him 
a  pension  for  life,  if  he  will  serve  twenty  years,  the  pension  is  irrevocable. 
People  v.  Coler  (1903),  173  N.  Y.  103.    So  is  a  bounty  promised  on  a  consid- 
eration which  has  been  performed.     People  v.   East  Saginaw  Salt  Co.    (1861), 
9  Mich.  327. 

105.  In  re   Bristol    (1916),   160  N.   Y.   Supp.  410,    173  App.   Div.   545, 
affirming  158  N.  Y.  Supp.  503,  93  Misc.  Rep.  626  (teachers'  pensions).     But 
in  Ball  v.   Board  of  Trustees   (1904),  71   N.  J.   Law  64,  58  A.   Ill,  a  New 
Jersey  court  held  that  where  a  teachers'  pension  fund  established  pursuant 
to  statute  was  wholly  made  up  of  contributions  by  teachers  and  of  gifts, 
the  acceptance  of  a  contribution  created  a  contract  by  the  board  to  award 
a  pension  on  the  fulfillment  of  the  conditions,  and  that  a  later  statute  which 
made  the  right  conditional  on  the  approval  of  the  board,  whose  decision 
as  to  whether  the  conditions  were  fulfilled  should  be  conclusive,  impaired 
the   obligation   of  the   contract.     "The   annuity,"   said  the   court,   "is   not   a 
pension  granted  by  the  state  and  no  part  of  it  is  payable  out  of  state  funds." 

In  Gibbs  v.  Minn.  etc.  Assn.  (1914),  125  Minn.  174,  145  N.  W.  1075,  Ann. 
Cas.  1915C,  749,  the  state  had  created  a  firemen's  relief  association,  with 
a  pension  fund  supported  partly  by  the  state  and  partly  by  members'  dues. 
It  was  held  that  pensions  contributed  to  by  state  money  were  under  control 
of  the  state,  that  the  association  made  no  contract  with  its  members  to 
continue  to  pay  them,  and  that  the  state  might  by  law  cut  off  pensions 
already  granted. 


282  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

as  its  continuance  is  thought  conducive  to  the  general  good.105"  So  far 
as  relates  to  installments  not  yet  payable,  a  statute  is  valid  which  dis- 
continues pensions  or  reduces  their  amount  or  subjects  them  to  new 
conditions,  not  only  as  applied  to  persons  who  have  entered  service  in 
expectation  of  pensions  without  yet  having  become  entitled  to  them,106 
but  also  as  to  persons  who,  as  by  long  service  are  entitled  to  receive 
a  pension  on  application,107  and  even  as  to  pensioners  already  on  the 
rolls  and  in  receipt  of  pensions.108 


105a.  The  principle  applicable  is  that  which  controls  the  construction 
of  laws  fixing  official  salaries,  granting  exemption  from  annual  taxation, 
or  offering  annual  bounties.  It  is  "well  settled  that  salaried  public  offices 
created  by  the  legislature  are  not  held  by  contract  or  grant.  The  legisla- 
ture has  full  control  over  them  unless  restricted  by  the  constitution,  and 
may  abolish  them  altogether,  or  impose  upon  them  new  duties  or  reduce 
their  salaries."  Miller  v.  Kister  (1885),  68  Cal.  144,  8  P.  813;  Pennie  v.  Reis 
(1889),  80  Cal.  266,  22  P.  176  (even  if  it  were  true  that  pension  is  a  part 
of  salary,  salary  could  be  reduced  during  term  'of  office  by  abolishing  pen- 
sion); State  v.  Board  of  Trustees  (1904),  121  Wis.  44,  98  N.  W.  954  (same 
point).  An  exemption  from  taxation  available  to  persons  who  comply  with 
certain  conditions  is  presumably  not  intended  as  a  promise  to  continue  the 
exemption,  and,  though  the  condition  has  been  complied  with,  may  be 
withdrawn  for  the  future.  •  People  v.  Roper  (1866),  35  N.  Y.  629  (exemption 
from  poll  tax  after  seven  years  in  militia);  Salt  Co.  v.  East  Saginaw  (1871), 
13  Wall.  373,  affirming  19  Mich.  259,  2  Am.  Rep.  82  (exemption  of  property 
used  in  making  salt).  As  to  offer  of  annual  bounty,  see  Comm'rs  of  Jeffer- 
son Co.  v.  Hudson  (1878),  20  Kans.  71. 

A  grant  to  a  firemen's  relief  association  of  a  share  of  fire  insurance 
rates  received  by  the  city  does  not  confer  a  right  to  receive  the  rates  so 
long  as  the  city  shall  levy  them,  and  the  legislature  may  devote  them  to 
another  use.  Benevolent  Assn.  v.  Farwell  (1881),  100  111.  197,  affirming 
4  111.  App.  36. 

106.  Pecoy   v.    Chicago    (1914),   265    111.    78    (term    of   police    service 
changed  from  ten  years  to  twenty  years);  Pennie  v.  Reis  (1889),  132  U.  S. 
464,  affirming  80  Cal.  266,  22  P.  176  (repeal  of  $1000  benefit  payable  to  rep- 
resentatives on  policeman's  death  in  service);  Clarke  v.  Police  Ins.  Board 
(1898),  123  Cai.  24,  55  P.  576  (same  facts);  State  v.  Board  (1916),  192  Mo. 
App.  583,  184  S.  W.  929  (semble) ;  Friel  v.  McAdoo  (1905),  91  N.  Y.  Supp. 
454,  101  App.  Div.  155,  affirmed  in  181   N.  Y.  558,  74  N.  E.  1117   (retiring 
allowance   made   dependent   on   board's   discretion);    In   re    Bristol    (1916), 
160  N.  Y.  Supp.  410,  173  App.  Div.  545,  affirming  158  N.  Y.  Supp.  503,  93  Misc. 
Rep.  626  (school  pensions  repealed  as  to  janitors);  State  v.  Board  of  Trus- 
tees (1904),  121  Wis.  44,  98  N.  W.  954. 

107.  Chalk  v.    Darden    (1877),   47   Texas   438    (law   for   pensions    for 
soldiers   taken    prisoner   repealed   after   application   for   pension   but   before 
certificate  issued);  Cohrn  v.  Henderson  (1912),  19  Cal.  App.  89,  124  P.  1037 
($1000  death  benefit  to  widow  on  death  of  policeman  retired  on  pension 
repealed   after   retirement   and   before    death);    Gibbs   v.    Minn.    etc.    Assn. 
(1914),   125  Minn.   174,  145  N.  W.   1075,  Ann.  Cas.   1915C,  749   (pension  to 
fireman's  widow  repealed  after  fireman's  death  and  before  application  for 
pension). 

108.  Ricks,  J.,  in  Eddy  v.  Morgan  (1905),  216  111.  437,  449  ("Because 
one  is  placed  upon  a  pension  roll  under  a  valid  law  is  no  reason  why  that 
law  may  not  be  repealed  and  the  pension  cease.").     U.  S.  v.  Teller  (1882), 
107  U.  S.  64  (grant  of  military  pension  revoked). 

O'Mara  v.  U.  S.  (1911),  47  Court  of  Claims  27  (soldier's  pension  made 
payable  to  soldiers'  home  of  which  he  was  inmate) ;  Dale  v.  Governor  (Ala. 
1831),  3  Stewart  387  (A  statute  directing  the  treasurer  to  pay  annually  for 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  283 

A  discontinuance  of  a  pension  will  generally  be  brought  about  by 
a  repeal  of  the  statute  under  which  it  was  granted,  for  the  repeal  re- 
vokes authority  to  make  future  payments,  except  as  to  installments  due 
at  the  time  of  repeal.109 

A  pension,  though  revocable,  is  when  granted  unconditionally,  not 
a  mere  expectation  of  gratuity,  but  a  present  property  right ;  in  essence, 
it  is  the  present  right  to  receive  payments  of  installments  as  they  may 
fall  due  in  future,  unless  and  until  the  pension  is  determined.  In  the 
absence  of  statutory  restriction,  the  pensioner  may,  as  will  hereafter 
be  seen,  assign  the  right,  and  his  creditors  may  reach  it  to  apply  it  to 
the  payment  of  his  debts.  As  each  installment  falls  due,  there  arises 
a  right  to  receive  payment  which  is  irrevocable  and  passes  on  the  pen- 
sioner's death  as  a  part  of  his  estate.110 

These  statements  apply  to  pensions  in  the  strict  sense.  It  is,  how- 
ever, necessary  in  every  case  to  examine  the  terms  of  the  authority 
under  which  the  pension  is  granted,  for  where  it  is  payable  only  out 
of  a  particular  fund,  or  at  the  discretion  of  the  board,  these  conditions 

life  a  colonel's  half  pay  for  services  and  sufferings  in  Indian  wars  is  not 
a  grant  of  an  annuity,  and  its  repeal  does  not  impair  the  obligation  of 
contract);  MacFarland  v.  Bieber  (1909),  32  App.  D.  of  CoU  513  (act  taking 
away  statutory  monthly  pension  to  fireman  retired  for  disabling  disease 
contracted  in  line  of  duty  does  not  deprive  of  property,  or  violate  a  con- 
tract, as  a  pension  is  a  bounty);  Head  v.  Jacobs  (1912),  150  Ky.  290,  150 
S.  W.  349  (discontinuance  of  life  pension  granted  by  board  under  general 
law);  Minegar  v.  Minn.  etc.  Assn.  (1914),  126  Minn.  332,  148  N.  W.  279 
(widows'  pensions  discontinued  as  to  common  law  wives);  State  v.  Farley 
(1901),  22  Ohio  Cir.  Ct.  Rep.  48,  12  Ohio  Cir.  Dec.  273;  (fireman's  disability 
pension  increased  by  statute  from  $40  a  month  to  $50,  and  by  a  second 
statute  diminished  to  $42.50.  "The  granting  of  pensions  *  *  is  *  * 
of  such  a  nature  as  to  leave  it  within  the  power  of  the  legislature  to  wholly 
abolish  or  change.");  In  re  Snyder  (1916),  93  Wash.  59,  160  P.  12  (pension 
to  destitute,  abandoned  mothers  revoked  by  repeal  of  law) ;  Marchant  v. 

VLee  Conservancy  Board  (1874),  L.  R.  9  Ex.  60  (A  municipal  corporation, 
authorized  by  statute  to  grant  proper  annuities  to  retiring  officers,  passed 
a  resolution  on  an  officer's  retirement  "that  a  retiring  allowance  of  £300 
per  annum  be  granted  to  him  during  the  remainder  of  his  life."  It  was 
held  that  this  was  not  a  grant  of  an  irrevocable  right,  nor  was  there  a 
contract  arising  from  service  in  expectation  of  pension  that  such  annuity 
as  might  be  granted  would  be  continued,  and  that  after  the  corporation 
reduced  the  annuity,  there  was  no  right  except  to  the  reduced  amount.) 

109.  U.  S.  v.  Teller  (1882),  107  U.  S.  65;  Dale  v.  Governor  (Ala.  1831), 
3  Stewart,  387;  Cohrn  v.  Henderson  (1912),  19  Cal.  App.  89,   124  P.   1037; 
Chalk  v.   Darden   (1877),  47  Tex.  438;   In  re   Snyder   (1916),  93  Wash.   59, 
160  P.  12  (mothers'  pensions).     Compare  O'Dea  v.  Cook,  cited  in  note  112. 
But  a  proclamation  placing  certain  officers  without  the  scope  of  a  pension  act 
is  to  be  construed  only  as  preventing  the  award  of  pensions  in  future,  not  as 
cutting  off  pensions  already  granted.     Geary  v.  Queen  (Victoria,  Australia), 

110.  Foot  v.  Knowles  (Mass.  1842),  4  Met.  386;  Slade  v.  Slade  (Mass. 
1853),  11  Cush.  466;  Stevens  v.  Minn.  etc.  Assn.  (1914),  124  Minn.  381,  145 
N.  W.  35;  Alexander  v.  U.  S.   (1868),  4  Court  of  Claims,  218;   Noushabah 
Sooltan    Begum   v.    Nubeerah    Sooltan    Begum    (1868,    India,    Northwestern 
Prov.),  3  Agra,  High  Ct.  Rep.  44  (a  grant  of  pension  to  another  on  pen- 


284  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

are  limitations  on  the  right;  and  where  it  appears  that  there  was  no 
intent  to  expose  the  city  or  board  to  liability  to  a  money  judgment,  it 
may  be  that  the  only  remedy  is  by  mandamus  against  the  officers 
charged  with  the  duty  of  making  payment.  Nevertheless  such  pro- 
visions as  to  the  conditions  upon  which  or  the  mode  in  which  the  right 
may  be  enforced,  would  not  ordinarily  affect  the  nature  of  the  right. 
To  say  that  a  man  has  been  granted  a  pension  is  not  a  mere  mode  of 
expressing  the  fact  that  it  is  the  duty  of  the  pension  board  to  pay  him 
money  at  stated  intervals.  It  is  the  fact  that  he  has  the  pension  which 
is  the  ground  for  imposing  on  the  board  a  duty  to  pay  it. 

Thus  it  is  held  in  England  that  though  its  payment  is  dependent 
on  annual  votes  of  the  legislature,  a  pension  is  property  and  passes  on 
the  pensioner's  bankruptcy  to  his  trustee,111  and  that  though  there  is 
no  remedy  provided  by  which  suit  can  be  maintained  against  the  city 
for  an  overdue  installment  of  a  police  pension,  nevertheless  the  city 
is  subject  as  a  debtor  to  garnishment  by  a  creditor  of  the  pensioner. 
The  installments  in  arrears  constitute  a  debt.112  Where  a  California 
statute  provided  that  on  a  policeman's  death  his  widow  should  have 
$1,000,  and  on  application  by  a  widow  the  award  was  wrongfully 
refused,  and  then  the  statute  was  repealed,  it  was  held  that  the  widow 
was  nevertheless  entitled  to  mandamus  to  compel  the  pension  board 
to  pay  the  money,  on  the  ground  that  her  right  was  a  vested  right  of 
property  which  survived  the  repeal  of  the  statute,  and  of  which,  the 
court  thought,  the  legislature  could  not  constitutionally  have  deprived 
her.113  And  it  has  several  times  been  said  that  where  one  is  imme- 
diately and  unconditionally  entitled  to  receive  pension  ni 

sioner's   death   does   not   carry  the  arrears.)     But  see   In   re   Smith    (1( 
130  N.  C.  638,  41  S.  E.  802,  and  Gill  v.  Dixon,  commented  on  in  not, 

By  force  of  an  act  of  Congress  if  a  federal  pensioner  dies  leaving  a 
widow  or  children,  pension  arrears  are  not  a  part  of  his  estate,  but  are 
payable  to  the  widow  or  children.  Walton  v.  Cotton  (1850),  19  How.  355; 
Fogg  v.  Perkins  (1848),  19  N.  H.  101;  Perkins  v.  Perkins  (1865),  46  N.  H. 
110;  Chapman  v.  Loveland  (1860),  11  Ohio  St.  214;  Pinson  v.  Sanders 
(1906),  29  Ky.  Law  Rep.  715,  96  S.  W.  444. 

111.  Ex  parte  Huggins  (1882),  21  Ch.  Div.  85. 

112.  Booth  v.  Trail  (1883),  12  Q.  B.  D.  8;  Williams  v.  Delohery  (1913), 
A.  C.  172.      Where    a    California    statute    pensioning    widows    of    policemen 
killed  on  duty  was  repealed  as  to  certain  injuries  after  a  policeman  had 
been  so  injured  but  before  he  died,  the  repeal  was  held  not  to  apply,  on  the 
ground  that  when   the   injury   occurred   there   came   into   existence,   not  a 
mere  offer  of  gratuity,  but  a  right  to  have  a  pension  if  the  injury  proved 
fatal,    and    there    was    presumably    no    intent    to    revoke    an    existing    right. 
O'Dea  v.  Cook  (1917),  — Cal.  — ,  169  P.  366. 

113.  Kavanaugh   v.    Board    (1901),    134  Cal.    50,   66    P.   36.     See,   also, 
MacFarland  v.  Bieber  (1909),  32  App.  D.  of  C.  513  (arrears  not  affected  by 
repeal). 


ILLINOIS   PKNSION  LAWS  COMMISSION,  1918-1919 


285 


cation,  it  constitutes  a  claim  which  the  legislature  cannot  destroy.114 
Where  a  statute  made  pensions  incapable  of  transfer,  and  a  pensioner 
surrendered  his  right  to  the  government  in  exchange  for  a  lump  sum 
paid  in  commutation,  it  was  held  that  the  surrender  was  void  and  that 
the  right  to  the  pension  continued,  for  the  intent  of  the  statute  was 
not  to  put  the  pension  on  the  basis  of  a  mere  personal  gratuity,  but 
rather,  recognizing  it  as  a  property  right,  to  ensure  its  enjoyment  by 
the  recipient  against  his  own  improvidence,  by  rendering  him  incapa- 
ble of  giving  up  the  right,  even  to  the  government  against  which  it 
existed.115  A  pension  payable  from  city  revenues  to  a  retired  officer 
is  more  than  an  expectancy  of  future  income,  and  a  creditor  may  have 
a  receiver  appointed  to  receive  future  installments.118 

The  Illinois  courts  take  the  same  view  of  the  nature  of  a  pension. 
In  O'Connor  v.  Trustees  of  Firemen's  Pension  Fund,117  it  was  held 
that  a  fireman,  presently  entitled  to  a  pension,  though  he  had  not  yet 
applied  for  it,  had  such  right  to  receive  it  as"  to  give  him  an  equitable 
interest  in  the  management  of  the  fund  sufficient  to  entitle  him  to 
maintain  on  behalf  of  all  future  beneficiaries,  a  bill  against  the  pen- 
sion board  to  prevent  their  paying  unauthorized  pensions.  •  In  Hughes 
v.  Traeger,118  Mr.  Justice  Dunn,  speaking  for  the  court,  said  that  the 
legislature  might  divert  a  pension  fund  to  other  uses  without  violating 
any  right  of  an  expectant  pensioner  "for  until  the  happening  of  the 
ci'cnt  designated  by  the  statute  for  its  distribution  he  has  no  vested 
right  in  the  fund,  but  only  an  expectancy  created  by  the  law  which 
the  law  may  revoke  and  destroy."  The  above  authorities,  it  will  be 
noted,  are  inconsistent  with  the  theory  that  a  pension  awarded  is  a 
mere  expectation  of  future  gratuities,  or  that  pension  money  is  paid  as 
a  present  gratuity ;  but  they  depend  on  the  theory  that  a  pension  when 
awarded  is  property  of  the  pensioner,  and  gives  him  so  long  as  it 
remains  undetermined,  a  right  to  receive  the  installments  of  pension 
money,  and  that  on  the  happening  of  the  event  which  determines  the 
right  to  any  installment,  it  becomes1  irrevocable  as  to  that  installment. 
This  theory  is  borne  out  also  by  the  cases  under  the  succeeding  sub- 
headings.119 

114.  Pennie  v.  Reis  (1889),  132  U.  S.  464,  471;  Gibbs  v.  Minn.  etc.  Ass. 
(1914),  125  Minn.  174,  145  N.  W.   1075,  Ann.  Cas.  1915C,  749.    See  Preston 
v.  Chicago  (1912),  226  U.  S.  447,  on  error  to  246  111.  26. 

115.  Dionne  v.  Queen  (1895),  24  Canada  Sup.  Ct.  451. 

116.  Imperial  Bank  v.  Motton  (1897),  29  Nova  Scotia  368,  and  cases 
in  note  147. 

117.  (1910),  155  111.  App.  460. 

118.  (1914),  262  111.  612. 

119.  But  Gill  v.  Dixon  (1902),  131  N.  C.  87,  42  S.  E.  538  held  that  the 
right  to  receive  future  installments  of  a  pension  was  not  assignable  because 
until  the  warrant  issued  the  pensioner  had  no  interest  in  them,  and  conse- 
quently nothing  to  assign.   The  decision  probably  rests  on  the  language  of 


286  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

b.     Assignment  of  Pensions 

A  pension  is  assignable  except  so  far  as  in  special  cases  reasons 
of  public  policy  or  statutes  prevent.  Not  only  is  it  like  an  ordinary 
chose  in  action,  assignable  in  equity,120  but,  as  a  property  right,  it  is 
assignable  at  law,  so  that  the  assignee  becomes  entitled  as  of  his  own 
right,  and  not  merely  as  a  person  having  an  interest  in  the  claim  of 
another.  121  In  the  leading  case  of  Wells  v.  Foster,  Baron  Parke  said : 
"*  *  *  a  man  may  always  assign  a  pension  given  to  him  entirely  as 
a  compensation  for  past  services,  whether  granted  to  him  for  life  or 
merely  during  the  pleasure  of  others.  In  such  a  case  the  assignee 
acquires  a  title  to  it  both  in  equity  and  at  law  and  may  recover  back 
any  sums  received  in  respect  of  it  by  the  assignor  after  the  date  of  the 
assignment." 

But  by  English  law,  where  a  pension  is  awarded  to  a  person  who, 
though  retired  from  active  service,  is  liable  to  being  recalled  to  duty, 
it  is  considered  that  a  part  of  the  purpose  is  to  enable  him  to  maintain 
himself  in  fitness  for  the  duties  he  may  be  called  upon  to  perform,  and 
hence  the  right  is  personal  to  the  grantee,  and,  like  a  right  to  practice 
law  or  medicine,  is  incapable  of  transfer  to  another.122  Upon  an 
analogous  ground,  a  "pension  having  for  its  object  a  perpetual  memorial 
of  national  gratitude  for  public  services"  is,  in  England,  incapable  of 
assignment.123  For  similar  reasons,  salaries  not  yet  earned  of  officers 


the  statute  (N.  C.  Acts  of  1899,  Chap.  198,  Sec.  13)  which  is  to  the  effect 
that  when  warrent  issues  the  pensioner  has  a  vested  right.  Nagle  v.  Stagg 
(N.  Y.  1874),  15  Abb.  Prac.  (N.  S.),  348  held  that  as  the  police  pension  there 
in  question  was  a  gratuity,  overdue  installments  were  not  a  debt,  and  a 
receiver  of  the  property  of  a  pensioned  ex-policeman  had*  no  authority  t& 
receive  them.  In  State  v.  Holmes  (1915),  23  Ohio  Cir.  Ct.  Rep.  (N.  S.),  133, 
it  was  assigned  as  a  reason  why  mandamus  lay  to  compel  payment  of  a 
pension,  that  the  city  was  not  suable  as  for  a  debt  because  the  pension  was 
gratuitous. 

Timothy  v.  Day  (1906),  2  Irish  Rep.  26;  Gibson  v.  East  India  Co.  (Eng. 
1839),  5  N.  C.  262,  7  Scott  74;  and  Innes  v.  East  India  Co.  (Eng.  1856),  17 
C.  B.  351,  are  not  inconsistent  with  the  doctrine  stated  in  the  text.  The 
first  case  was  an  award  of  a  gratuity;  in  the  others  pensions  to  employes 
were  granted  only  by  resolution  of  a  corporation's  board  of  directors. 

120.  Spooner  v.  Payne  (Eng.  1849),  2  De  Gex  &  Smale  439,  affirmed 
(1852),  1  De  Gex  M.  &  G.  383;  Heald  v.  Hay  (Eng.  1862),  3  Giff.  467;  Carew 
v.  Cooper  (Eng.  1863),  4  Giff.  619;  James  v.  Ellis  (Eng.  1870),  24  L.  T.  12, 
19  W.  R.  319;  Lloyd  v.  Eagle  (Eng.  1858)  28  L.  J.  Ch.  389,  5  Jur.  (N.  S.),  187; 
Ex  parte  Huggins  (Eng.  1882),  21  Ch.  Div.  85. 

121.  Wells  v.  Foster  (Eng.  1841),  8  M.  &  W.  149,  152;  McCarthy  v. 
Gould  (Ire.  1810),  1  Ball  &  B.  387.    (The  pensioner's  creditor  may  have  a 
receiver  appointed  without  serving  notice  on  the  Lords  of  the  Treasury  as 
debtors);  Madhavrav  Panae  v.  Bapurav  Panse  4  Bombay  A.  C.  62. 

122.  Wells  v.  Foster  (1841),  8  M.  &  W.  149,  152. 

123.  Davis  v.  Duke  of  Marlborough  (1818),  1   Swan.  74.    In  an  early 
case  it  was  said:    "If  a  man  were  created  duke,  and,  for  the  maintenance 
of  his  dignity,  the  king  granted  him  L20,  he  could  not  grant  that  to  any 
other,  for  it  is  incidental  to  his  dignity."     Oliver  v.  Emsonne  (1514),  Dyer 
1,  b,  2a. 


Jl.UNOIS  PENSION  LAWS  COMMISSION,  1918-1919  287 

of  the  national  government  by  English  law  are  not  assignable.  They  are 
intended  to  supply  the  incumbents  with  the  means  which  may  be  neces- 
sary for  the  proper  discharge  of  their  duties.1-4 

In  the  United  States,  the  same  rule  exists,  and  is  extended  even 
to  salaries  of  municipal  officers.  They  are  not  assignable  except  so  far 
as  already  earned.125  It  therefore  seems  probable  that  in  the  United 
States  municipal  pensions  to  officers  retired  from  active  duty,  but  sub- 
ject to  recall  to  duty  and  still  in  service  so  as  to  be  subject  to  dismissal, 
would  be  held  to  be  unassignable,  so  far  as  concerns  installments  not 
yet  due,  as  national  pensions  are  in  England.  If  so,  then  as  to  officers 
or  employes  retired  on  pension  but  subject  to  recall  in  case  of  emer- 
gency or  of  recovery  from  disability,126  the  question  of  assignability 
may  resolve  itself  into  a  question  arising  on  the  terms  of  the  particular 
statute  as  to  whether  the  pension  has  as  a  part  of  its  purpose  to  enable 
the  municipality  to  obtain  the  pensioner's  services  when  the  occasion 
for  recall  arises.  A  superannuation  allowance  to  which  a  statutory 
liability  is  attached  to  re-enter  the  service  if  required,  has  been  held  not 
assignable.127  But  other  courts  have  held  that  a  pensioner  so  liable  to 
recall  is  not  in  government  service,128  and  that  his  pension  is  not 
awarded  in  expectation  of  future  service,  and  is  not  conditioned  on 
his  remaining  in  the  state.129 

Pension  laws  frequently  provide  that  the  pensions  shall  not  be 
assignable.130  Such  a  provision  makes  void  an  assignment  of  a  right  to 


124.  Stone  v.  Lidderdale  (1795),  2  Anst.  533  (army  and  navy  officers); 
Barwick  v.  Reade   (1791),   1   H.  Bl.  627;  Palmer  v.  Bate   (1821),  2  Brod.  & 
Bing.  673  (clerk  of  the  peace);  Cooper  v.  Reiliy  (1829),  2  Sim.  560  (assist- 
ant  Parliamentary   counsel   to   Treasury);   Arhuthnot  v.    Norton    (1846),   5 
Moo.  P.  C.  C.  219;  Picton  v.  Culien  (1900),  2  Irish  Rep.  612,  semble;  Kenny, 
J.,  in  McCreery  v.  Bennett  (1904),  2  Irish  Rep.  69.    But  the  rule  does  not 
prevent   creditors   reaching  installments   of   salary  already   due.    Picton   v. 
Culien   (1900),  2  Irish   Rep.  612.    And,  in   England,  the  doctrine  does  not 
apply   to   salaries    of   local    offices    payable    from   local    funds.     A    chaplain 
appointed    to    a    city    workhouse    may   validly    assign    his    future    salary    as 
security  for  a  debt.    In  re  Mirams   (1^891),  1  Q.  B.  594.    And  a  grant  of  a 
menial  office  in  the  House  of  Lords  for  a  term  of  years  is  liable  to  creditors. 
Schellinger  v.  Blackerby  (1749),  1  Ves.  Sr.  347. 

125.  Bliss  v.  Lawrence  (1874),  58  N.  Y.  442;  Bowery  Bank  v.  Wilson 
(1890),  122  N.  Y.  478;  Dillon,  Mun.  Corp.  Sec.  428,  n. 

126.  See,  for  example,  the  provisions  of  111.  Laws  1917,  pp.  234,  236, 
264,  273,  276,  277,  614. 

127.  Waldron  y.    Croghan    (1881),  7  L.   R.   Irish  320;    MacDonald  v. 
O'Toole  (1908),  2  Irish  386  (the  court  will  not  appoint  a  receiver  by  way 
of  equitable  execution  over  future  installments). 

128.  Dionne  v.  Queen  (1895),  24  Canada  Sup.  Ct.  451. 

129.  Moffatt  v.  Lowell  (1913),  215  Mass.  92.    And  see  cases  cited  in 
note  197. 

130.  It  is  expressly  so  provided,  in  varying  language,  in  the  Illinois 
policemen's    and    firemen's    acts    for    cities    of    200,000,    in    the    municipal 
employes'  act  of  1911,  and  in  the  acts  for  officers  and  employes  in  counties 
of   150,000,  for  house  of  correction  employes,  for  public  library  employes, 


288  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

the  pension  as  a  whole  or  of  the  right  to  receive  particular  installments 
due  or  to  fall  due  in  the  future,  whether  made  by  way  of  sale  or  to 
secure  a  debt.  It  prevents  the  accrual  to  a  pension  agent  of  a  lien  on 
a  military  pension  certificate  for  his  reasonable  fees  for  services.131 

A  considerable  litigation  has  arisen  as  to  what  transactions  in 
relation  to  pensions  are  void  as  attempted  assignments.  Since  the 
object  is  to  secure  to  the  pensioner  the  continued  receipt  of  the  means 
of  support,  a  transfer  to  the  government  or  body  which  has  granted 
the  pension  is,  it  has  been  held,  within  the  prohibition,  so  that  a  sur- 
render of  the  pension  for  a  lump  sum  in  commutation  is  void,  and  the 
pension  continues  to  be  payable.132 

A  provisional  credit  for  an  installment  of  pension  money  due, 
given  to  a  pensioner  by  a  bank  which  has  received  his  power  of  attor- 
ney to  collect  but  has  not  yet  collected  it,  is  in  effect  only  a  claim  to 
the  pension  money  itself,  and  so  unassignable,  and  consequently  not 
subject  to  garnishment  by  the  pensioner's  creditors.  But  when  the 
bank  has  received  the  pension  money,  and  the  pensioner  has  had  an 
opportunity  to  avail  himself  of  it,  his  bank  account,  though  it  arises 
wholly  from  pension  money,  is  assignable  and  subject  to  attachment, 
being  the  equivalent  of  money  in  the  pensioner's  hands.133 

Where  pension  money  is  paid  by  warrant  or  check  to  the  pen- 
sioner's order,  the  instrument,  though  only  conditional  payment,  is 
assignable,134  and  hence  the  delivery  of  a  pension  check  with  power  of 
attorney  to  collect  it,  entitles  the  holder  to  keep  the  money  if  such  is 
the  intent.135  A  rule  of  the  board  of  managers  of  a  soldiers'  home 
which,  to  preserve  discipline  and  prevent  intoxication  and  extravagance, 
requires  inmates  to  deposit  on  receipt  of  their  pension  checks  all  sums 
in  excess  of  $5,  is  not  void  as  compelling  the  assignment  of  pensions 
which  by  act  of  Congress  are  unassignable,  where  the  managers  hold 
the  excess  for  account  of  the  pensioner  or  of  his  dependents.13"  An 
agreement  to  pay  a  portion  of  pension  money  as  such  is  an  assignment 
of  an  interest  in  the  pension,  but  an  agreement  to  pay  a  sum  of  money 
does  not  constitute  an  assignment  of  an  interest  in  a  pension,  simply 

for  park  police,  and  for  teachers  and  public  school  employes.  The  firemen's 
act  for  cities  of  5000  to  200,000,  and  the  municipal  employes  act  of  1905 
provide  that  the  pension  fund  shall  be  sacredly  kept,  and  distributed  for 
pensioning  the  persons  named,  and  for  no  other  purpose.  The  policemen's 
act  of  1887,  and  the  policemen's  act  for  cities  of  5000  to  100,000  are  silent. 

131.  Payne  v.  Woodhull  (N.  Y.  1856),  6  Duer  169. 

132.  Dionne  v.  Queen  (1895),  24  Canada  Sup.   Ct.  451. 

133.  Jones  &  Co.  v.  Coventry  (1909),  2  K.  B.  1029. 

134.  Tanner  v.  Turner   (1884),  64  Iowa  690,  21   N.  W.   140;  Jones  & 
Co.  v.  Coventry  (1909),  2  K.  B.  1029. 

135.  Schwab  v.  Ginkinger  (1897),  181  Pa.  St.  8,  37  A.  125. 

136.  Loser  v.  Board  of  Managers  (1892),  92  Mich.  633,  52  N.  W.  956. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  289 

because  payment  is  to  be  made  when  pension  money  is  received,  or  is 
to  be  made  out  of  the  money  received  and  not  otherwise,  or  because 
the  amount  payable  is  to  be  equal  to  a  given  percentage  of  the  pension 
money.  Thus  an  agreement  that  an  agent  to  obtain  and  collect  a  pen- 
sion, may,  as  compensation,  retain  from  the  money  received  so  much 
as  is  awarded  as  back  pay,  is  void  as  an  attempt  to  assign  a  portion  of 
the  pension  right.137  But  a  contract  to  pay,  as  compensation  for  serv- 
ices in  securing  the  pension,  an  amount  equal  to  half  of  the  pension 
that  may  be  secured  is  not  an  assignment,  as  it  -gives  no  interest  in  the 
pension  money.138  So  of  an  agreement  to  pay,  for  services  in  endeav- 
oring to  secure  an  increase  of  pension,  a  sum  equal  to  one-third  of  the 
increase  that  should  be  secured.139  So,  also,  of  an  agreement  to  repay 
money  borrowed  to  use  in  getting  a  pension  when  an  equal  amount 
of  pension  money  shall  have  been  received.140 

Pension  money  when  received  may  be  disposed  of  as  the  pensioner 
wishes.  Paying  it  all  over  in  consideration  of  an  agreement  to  support 
the  pensioner  is  not  an  assignment  of  the  pension,  though  the  purpose 
of  the  pension  grant  was  to  assure  the  pensioner  an  independent  means 
of  support.  Accepting  a  large  gift  made  out  of  pension  money  in 
gratitude  for  services  in  securing  the  pension  does  not  violate  an  act 
of  Congress  which  forbids  directly  or  indirectly  receiving  more  than 
$25  for  the  services.141 

Whether  a  bequest  of  pension  money  due,  or  perhaps  a  general 
assignment  of  it  for  benefit  of  creditors,  would  fall  within  a  provision 
against  assignments,  might  perhaps  depend  on  the  language  and  con- 
text of  the  prohibition.  The  act  of  Congress  which  makes  null  all 
transfers  of  claims  against  the  United  States  is  held  not  to  apply  to 
voluntary  assignments  for  creditors,  and  not  to  prevent  title  passing 
to  a  trustee  in  bankruptcy,  or,  it  seems,  passing  by  bequest.142 

c.     Creditors'  Rights  to  Pension  Money 

Since  in  the  absence  of  statute  or  special  reason  of  policy  to  the 
contrary  pension  money  does  not  have  to  be  paid  for  account  of  the 
pensioner  himself,  but  his  rights  in  his  pension  are  transferable,  his 
creditors  may  by  appropriate  legal  process  secure  the  application  of  the 
pension  money  toward  the  satisfaction  of  their  claims.  "A  pension 

137.  Powell  v.  Jennings  (1856),  3  Jones  Law  (48  N.  C.),  547. 

138.  Painter  v.  Drum   (1861),  40  Pa.  St.  467. 

139.  Jenkins  v.  Hooker  (N.  Y.  1854),  19  Barb.  435. 

140.  Crane  v.  Linneus   (1885),  77  Me.  59. 

141.  Schwab  v.  Ginkinger  (1897),  181  Pa.  St.  8,  37  A.  125. 

142.  Erwin  v.  U.  S.  (1879),  97  U.  S.  392;  Goodman  v.  Niblack  (1880), 
102  U.  S.  556. 


290  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

granted  for  past  services,  like  any  other  available  income,  is  attachable 
for  the  purpose  of  satisfying  the  party's  just  debts."143 

But  ordinary  methods  of  seizure  by  legal  process  may  be  inap- 
plicable. Where  pensions  are  payable  only  from  a  fund,  and  only  in 
such  proportion  as  in  the  opinion  of  the  board  the  fund  will  justify, 
installments  may  not  constitute  a  debt  owed  to  the  pensioner,  at  least 
until  action  by  the  board.  Moreover,  by  the  law  of  Illinois  and  of 
many  other  states  neither  writ  of  execution144  nor  process  of  garnish- 
ment served  on  the  debtor145  will  lie  against  a  municipality.  Apart 
from  these  difficulties,  future  installments  of  pension  money  cannot 
be  reached  by  garnishment,  because  they  do  not  constitute  a  debt  cer- 
tain to  fall  due,  for  the  pensioner  may  die  before  the  date  for 
payment.146 

It  is  an  established  practice  in  English  courts,  when  without 
power  to  order  the  pension  authorities  to  pay  the  money  into  court, 
to  appoint,  at  the  instance  of  a  creditor  who  cannot  otherwise  obtain 
adequate  relief,  a  receiver  or  sequestrator  with  authority  to  receive  pay- 
ment of  pension  money  due  or  thereafter  falling  due,  and  apply  it  on  the 
debt,  and  for  the  court  to  restrain  the  pensioner  from  collecting  it.147 

It  has  been  suggested  that  municipal  pensions  are  exempt  from 
seizure  for  debt  for  the  same  reasons  which  protect  municipal  sal- 
aries.148 In  an  Indiana  case,149  in  which,  however,  the  decision  turned 
upon  another  point,  the  court,  in  answer  to  the  suggestion,  said:  "It 
is  pushing  analogy  to  an  unreasonable  length  to  affirm  that  pensions  are 
protected  independently  of  statute,  upon  the  same  grounds  as  the  sal- 
aries of  public  officers.  The  salaries  of  officers  are  protected  from 
seizure  in  order  to  prevent  the  machinery  of  government  from  being 
stopped  by  a  withdrawal  of  compensation  from  those  charged  with  the 
administration  of  governmental  affairs,  and  this  reason  (and  reason  is 
the  life  of  all  rules  of  law)  cannot  extend  to  pensioners." 


143.  Willcock  v.  Terrell  -(Eng.  1878),  3  Ex.  D.  323.     See  also  cases  in 
note  147. 

144.  Chicago  v.  Halsey  (1861),  25  111.  595. 

145.  Millison  v.  Fisk  (1867),  43  111.  112;  Merwin  v.  Chicago  (1867),  45 
111.  133;  Bivins  v.  Harper  (1871),  59  111.  21  (school  directors);  Badenock  v. 
Chicago  (1806),  222  111.  71. 

146.  Webb  v.  Stenton  (1883),  11  Q.  B.  D.  518. 

147.  Willcock  v.  Terrell  (1878),  3  Ex.  D.  323  (judge's  pension);  Sansom 
v.  Sansom  (1878),  4  P.  D.  69;  M'Carthy  v.  Gould  (Ire.  1810),  1   Ball  &  B. 
387;  Snow  v.  Bolton  (1881),  17  Ch.  Div.  433;  Murphy  v.  Green   (1890),  26 
L.  R.  Irish  610;   Molony  v.   Cruise    (1892),  30   L.  R.   Irish  99;   Manning  v. 
Mullins  (1898),  2  Irish  34;  Imperial  Bank  v.  Motion  (1897),  29  Nova  Scotia 
368;    Knill   v.   Dumergue    (1911),  2   Ch.    199.    So  as  to   the   salary,   due   but 
unpaid,  of  a  public  schoolmaster;  Picton  v.  Cullen  (1900),  2  Irish  Rep.  612. 

148.  For  a  statement  of  these  reasons  see  Dillon,  Mun.  Corp.  Sec.  428. 

149.  Cavanaugh  v.  Smith  (1882),  84  Ind.  380,  386. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  291 

Pensioners,  however,  who  are  subject  to  being  recalled  to  duty 
may  be  in  a  position  analogous  to  that  of  officers,  and  if  a  pension  is 
held  to  be  unassignable  because  designed  to  enable  the  pensioner  to 
hold  himself  ready  for  future  duty,  it  should  for  the  same  reason  be 
exempt  from  attachment.  Reasons  of  public  policy  sufficicient  to 
prevent  the  man  himself  using  his  pension  to  pay  his  debts  should  be 
sufficient  to  prevent  his  creditors  so  using  it  against  his  will.150  Since, 
however,  an  officer's  creditors  may  reach  installments  of  his  salary 
already  earned  and  due,151  they  may  reach  overdue  installments  of 
pension  money.152 

Statutes   Exempting   Pensions  from   Attachment  by   Invalidating 
Assignments 

A  statute  which  invalidates  the  assignment  of  a  pension  would 
seem  for  the  reasons  just  stated  to  exempt  it  from  attachment.  Such 
was  held  to  be  the  result,  even  as  to  installments  already  payable,  of  an 
act  which  made  void  any  assignment  of  or  charge  upon  a  pension.153 
Even  where,  by  proceedings  adverse  to  the  pensioner,  pension  money 
had  been  paid  into  court,  it  was  decided  in  an  English  case  that  the 
creditor  was  not  entitled  to  the  money.154  Lord  Esher  said:  "It  was 
and  is  pension  on  its  way  from  the  Crown  to  the  defendant."  Bowen, 
L.  J.,  said:  "It  continued  to  be  pension,  which  he  had  no  power  to 
assign,  and  which  could  not  therefore  be  taken  in  execution."  But 
in  an  earlier  case  it  was  held  that  where  the  statute  under  which  a 
municipal  pension  was  granted,  made  the  pension  money,  as  it  became 
payable,  a  debt  due  from  the  city  to  the  pensioner,  a  creditor  could 
reach  the  debt,  in  spite  of  a  provision  that  the  pension  should  not  be 
assigned.155 

Statutes  Expressly  Exempting  Pensions  from  Attachment 

Pension  laws  frequently  provide  that  the  pensions  granted  shall  not 
by  any  legal  process  be  subject  to  payment  of  the  pensioner's  debts.  In 
Illinois  there  are  provisions,  variously  worded,  exempting  the  pensions 
or  the  pension  fund  in  all  the  municipal  pension  laws  except  the  police 
pension  act  of  1887,  and  the  police  pension  act  for  cities  of  5000  to 
100,000  inhabitants.  No  cases  construing  these  provisions  have  been 
found. 

150.  MacDonald  v.  O'Toole  (1908),  2  Irish  Rep.  386.   A  bounty  voted 
by  a  town  to  encourage  enlistment  in  the  army  is  on  grounds  of  policy 
exempt   from   attachment;    Morse   v.   Towns    (1864),   45    N.   H.    185:    Man- 
chester v.  Burns  (1864),  45  N.  H.  482. 

151.  Picton  v.  Cullen  (1900),  2  Irish  Rep.  612. 

152.  Booth  v.  Trail  (1883),  12  Q.     B.  D.  8. 

153.  Lucas  v.  Harris  (1886),  18  Q.  B.  D.  127. 

154.  Crowe  v.  Price  (1889),  22  Q.  B.  D.  429. 

155.  Booth  v.  Trail  (1883),  12  Q.  B.  D.  8. 


292  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

A  United  States  statute156  provides  that  as  to  federal  pensions 
"no  sum  of  money  due  or  to  become  due  to  any  pensioner  shall  be 
liable  to  attachment,  levy  or  seizure  by  or  under  any  legal  or  equitable 
process  whatever,  whether  the  same  remains  with  the  pension  office  or 
any  officer  or  agent  thereof,  or  is  in  course  of  transmission  to  the  pen- 
sioner entitled  thereto,  but  shall  enure  wholly  to  the  benefit  of  such 
pensioner."  This  protects  the  pensioner  until  the  money  has  come 
under  his  control.  Thus  though  a  statute  forbidding  the  assignment  of 
pensions  does  not  forbid  the  assignment  of  a  pension  check,  the  statute 
forbidding  the  attachment  of  pensions  forbids  the  attachment  of  a 
pension  check.157  Possession  of  the  check  gives  to  the  pensioner  power 
to  dispose  of  the  pension  money,  but  is  not  tantamount  to  receiving  it. 

It  has  been  held  that  the  federal  statute  exempts  not  only  the 
pension  check  in  the  pensioner's  hands,  but  a  credit  for  its  amount 
given  to  the  pensioner  by  a  bank  in  which  he  had  deposited  the  check 
for  collection,  and  that  the  fact  the  bank  had  collected  the  amount  of 
the  check  did  not  of  itself  show  that  its  proceeds  had  ceased  to  be  in 
course  of  transmission  to  the  pensioner  so  as  to  subject  the  credit  to 
garnishment.158 

A  pensioner  has  no  power  to  annul  a  statutory  exemption,  and 
therefore,  though  he  has  obtained  a  loan  by  saying  that  his  income  was 
not  pension  money,  he  may  claim  the  exemption  and  defeat  the 
lender.159 

So  long  as  pension  money  is  exempt  it  cannot  be  reached  even  to 
pay  a  claim  for  the  pensioner's  support.  Consequently  if  it  is  exempt 
in  the  hands  of  the  conservator  of  an  insane  pensioner,  a  county  which 
has  a  statutory  claim  against  the  pensioner  for  reimbursement  for  his 
past  support  cannot  reach  it  to  satisfy  the  claim,  nor  compel  the  con- 
servator to  use  it  in  paying  the  claim.160  But  where  a  conservator  has 
money  of  his  ward  it  is  his  duty  from  the  time  he  gets  it  to  use  it,  if 
needed,  in  supplying  his  ward  with  necessaries,  and  if  he  does  not  do 
so,  the  court  may  order  him,  not  only  to  do  so  in  future,  but  also  to 

156.  U.  S.  R.  S.  Sec.  4747.    That  the  statute  is  within  the  power  of 
Congress,  see  U  S.  v.  Hall  (1878),  98  U.  S.  343. 

157.  Tanner  v.  Turner  (1884),  64  Iowa  690,  21  N.  W.  140. 

158.  Reiff  v.  Mack  (1894),  160  Pa.  St.  265,  28  A.  699,  40  Am.  St.  Rep. 
720. 

159.  King  v.  Warren  (1903),  86  N.  Y.  Supp.  609,  and  cases  cited  17 
•Ann.  Cas.  1196. 

160.  Fayette   Co.  v.   Hancock   (1891),  83   Iowa  694,  49   N.   W.   1040; 
State  v.  Cole  (1912),  155  Iowa  654,  136  N.  W.  887.   And  see  Welch  v.  Burris 
(1870),  29  Iowa  186,  187.   The  state  cannot  reach  a  father's  exempt  pension 
money  to   satisfy  its  claim  for  expense  incurred   in   supporting  his   insane 
son.    St.  Lawrence  State  Hospital  v.  Fowler  (1895),  37  N.  Y.  Supp.  12,  15 
Misc.  159. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  293 

reimburse  one  who  has  rightfully  supplied  in  the  past  the  support  the 
conservator  should  have  supplied.  In  doing  so,  it  does  not  appropriate 
the  money  to  pay  a  claim  against  the  ward;  it  enforces  the  conserva- 
tor's duty  to  use  it  for  the  ward's  benefit.161 

On  the  same  principle,  though  a  husband's  pension  is  exempt 
from  attachment,  a  court  may  award  his  wife  larger  alimony  on  divorce 
than  if  he  had  not  had  it;102  or  in  a  suit  for  maintenance  may  order 
a  husband  to  contribute  to  his  wife's  support,  though  his  pension  is 
his  only  source  of  income,  and  the  order  in  effect  deprives  him  in  part 
of  its  enjoyment.163 

In  an  interesting  New  York  case,  the  wife  of  a  pensioned  police- 
man obtained  an  order  for  separate  maintenance,  and  her  husband  left 
the  state  to  avoid  complying  with  it.  Though  the  pension  was  by  statute 
exempt  "from  all  process  and  proceedings  to  enjoin  and  recover  the 
same  on  behalf  of  any  person  having  any  .claims  against  any  pen- 
sioner," an  order  was  granted  sequestrating  so  much  of  the  pension 
($26  out  of  $68  a  month)  as  was  deemed  a  suitable  share  for  the  wife, 
and  the  custodians  of  the  fund  were  directed  to  pay  it  to  her.  This  the 
court  considered  to  be  securing  payment  of  the  pension  to  the  proper 
beneficiary,  not  diverting  it  from  the  beneficiary  to  pay  a  claim  against 
him.  Woodward,  J.,  said :  "We  do  not  believe  the  legislature,  in 
creating  the  police  pension  fund  and  exempting  it  from  execution 
and  other  processes,  ever  intended  that  this  exemption  should  be  con- 
strued to  deprive  the  wife  of  her  legal  and  moral  right  to  the  support 
of  her  husband.  The  whole  purpose  of  the  statute  is  served  when  the 
fund  is  preserved  for  the  use  of  the  pensioner  and  those  legally 
dependent  upon  him  for  support  and  maintenance  *  *  *  "164 

By  the  better  view,  a  statute  exempting  pensions,  though  it 
exempts  the  pensioner's  right  to  receive  pension  money,  does  not 
exempt  the  money  after  he  has  received  it.  It  is  now  settled  that  this 
is  the  meaning  of  the  act  of  Congress  which  exempts  pension  money 
"due  or  to  become  due"  and  provides  that  it  "shall  enure  wholly  to 
the  benefit  of"  the  pensioner.  "When  the  money  has  been  paid  to  him, 
it  has  'inured  wholly  to  his  benefit/  and  is  liable  to  seizure  as  oppor- 
tunity presents  itself."165 


161.  Matter  of  Strohm  (1906),  101  N.  Y.  Supp.  688,  51   Misc.  481. 

162.  Bailey  v.  Bailey  (1904),  76  Vt.  264,  56  A.  1014,  65  L.  R.  A.  332, 
104  Am.  St.  Rep.  935. 

163.  Tully  v.  Tully  (1893),  159  Mass.  91,  34  N.  E.  79. 

164.  Zwingman  v.  Zwingman  (1912),  134  N.  Y.  Supp.  1077,  150  App. 
Div.  358. 

165.  McKenna,  J.,  for  the   majority  in   Mclntosh   v.   Aubrey    (1902), 
185  U.  S.  122  (land  bought  with  pension  money);  In  re  Jones  (1909),   166 


294  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

That  the  exemption  provisions  in  Illinois  pension  laws  would  be 
construed  in  the  same  way,  may  perhaps  be  inferred  from  the  inter- 
pretation which  the  Illinois  Supreme  Court  has  put  upon  the  provisions 
of  R.  S.  Ch.  73,  Sec.  266,  relating  to  fraternal  beneficiary  societies. 
The  enactment  that  "the  money  or  benefit  *  *  *  to  be  paid,  provided 
or  rendered  by  any  society  *  *  *  shall  not  be  *  *  *  applied  by  any 
legal  or  equitable  process,  or  by  operation  of  law  to  pay  any  debt  or 
liability  of  a  certificate  holder  or  of  any  beneficiary"  is  held  not  to 
affect  a  case  where  the  money  has  been  paid  to  the  beneficiary  or  to 
his  agent.  The  beneficiary's  -creditor  may  then  attach  it.166  The  court 
said  the  purpose  was  to  protect  the  society,  not  the  beneficiary.167  The 
same  interpretation  has  been  given  to  R.  S.  Ch.  73,  Sec.  254,  relating 
to  assessment  life  insurance,  which  instead  of  exempting  "money  to  be 
paid"  exempts  the  "money  or  benefit  provided  or  rendered."  The 
proceeds  of  a  policy  in  the  hands  of  an  administrator  are  subject  to 
the  debts  of  the  assured.168 

A  New  York  statute,  however,  which  exempts  United  States  mili- 
tary and  naval  pensions  "from  levy  and  sale  by  virtue  of  an  execution 
and  from  seizure  for  non  payment  of  taxes,  or  in  any  other  legal  pro- 
ceedings" is  held  to  exempt  not  only  pension  money  after  its  receipt 
by  the  pensioner,  and  bank  credits  arising  from  its  deposit,109  but  prop- 
erty bought  with  the  pension  money  and  held  by  the  pensioner,  at 
least  so  far  as  it  is  necessary  for  his  support. 


Fed.  337  (money  in  pensioner's  possession  not  mingled  with  other  funds); 
Kellogg  v.  Waite  (Mass.  1866),  12  Allen  529  (pensioner's  agent  to  receive 
payment  may  be  garnished  in  respect  to  his  debt  to  the  pensioner  arising 
from  his  receipt  of  the  pension  money;  Spellman  v.  Aldrick  (1879),  126 
Mass.  113  (pension  money  deposited  in  bank);  Webb  v.  Holt  (1882),  57 
Iowa  712,  11  N  W.  658  (pension  money  in  bank);  Triplett  v.  Graham 
(1882),  58  Iowa  135,  12  N.  W.  143;  Roselle  v.  Rhodes  (1887),  116  Pa.  St. 
129,  9  A.  160,  2  Am.  St.  Rep.  591;  In  re  Ferguson's  Estate  (1909),  140  Wis. 
583,  123  N.  W.  123  (property  bought  with  pension  money;  cases  reviewed). 
The  following  cases  contra  are  overruled:  Crow  v.  Brown  (1892),  81  Iowa 
344,  86  Iowa  741,  46  N.  W.  993,  53  N.  W.  131,  11  L.  R.  A.  110,  25  Am.  St. 
Rep.  501:  In  re  Bean  (1900),  100  Fed.  262. 

166.  Martin  v.  Martin  (1900),  187  111.  200. 

167.  But  the  society  owes  a  duty  to  the  beneficiary  to  defend  garn- 
ishment proceedings.    Rumbold  v.  Royal  League  (1904),  206  111.  513. 

168.  Hamilton  v.  Barley  (1915),  266  111.  542.   Many  states  have  statutes 
which  to  a  greater  or  less  extent  protect  payees  of  life  insurance  policies 
from  claims  of  creditors.    Whether  the  protection  extends  to  the  insurance 
money  after  it  has  been  paid  over,  and  to  the  property  in  which  it  has 
been  invested,  whether  it  applies  to  policies  payable  to  the  insured's  estate, 
and  whether  it  is  available  against  creditors  of  the  beneficiaries,  or  next  of 
kin,  as  well  as  against  creditors  of  the  insured  are  questions  of  construction 
which  depend  largely  on  the  wording  of  the  particular  statutes.    Cases  are 
collected  in  5  L.  R.  A.   (N.  S.),  472;  24  L.  R.  A.   (N.  S.),  1018;   L.  R.  A. 
1915A  1201;  L.  R.  A.  1917  F.  1143. 

169.  Burgett  v.   Fancher   (1885),  35   Him.  647;   Stockwell  v.   Malone 
Nat.  Bk.  (1885),  36  Hun.  583. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  295 

In  Yates  County  Bank  v.  Carpenter,170  the  Court  of  Appeals  held 
that  the  statute  exempted  the  pensioner's  interest  in  his  dwelling 
house,  partly  paid  for  out  of  pension  money  and  mortgaged  to  secure 
the  rest  of  the  purchase  price.  Ruger,  C.  J.,  said:  "The  plain  purpose 
of  the  act  was  to  promote  the  comfort  of  the  soldier ;  to  secure  to  him 
the  bounty  of  the  government  free  from  the  claims  of  creditors,  and 
to  secure  to  him  and  his  family  a  safe,  although  modest,  maintenance, 
so  long  as  their  needs  required  it.  *  *  *  Where  such  (pension)  moneys 
can  be  clearly  identified  and  are  used  in  the  purchase  of  necessary 
articles,  or  are  loaned  or  invested  for  the  purpose  of  increase  or  safety 
in  such  form  as  to  secure  their  available  use  for  the  benefit  of  the 
pensioner  irt  time  of  need,  we  do  not  doubt  but  that  they  come  within 
the  meaning  of  the  statute;  but  where  they  have  been  embarked  in 
trade,  commerce  or  speculation,  and  become  mingled  with  other  funds 
so  as  to  be  incapable  of  identification,  we  do  not  doubt  but  that  the 
pensioner  loses  the  benefit  of  the  statutory  exemption." 

Following  this  construction  of  the  New  York  statute,  it  has  been 
held  that  land  bought  with  pension  money  and  conveyed  to  the  pen- 
sioner's wife  was  exempt  from  her  creditors;171  that  a  modest  dwell- 
ing house  bought  with  pension  money  was  exempt  from  the  pen- 
sioner's creditors,172  though  it  seems  that  if  the  value  increased  beyond 
what  was  necessary  for  the  family  needs,  the  excess  would  not  be 
exempt;173  but  that  land  paid  for  partly  with  pension  and  partly  with 
other  money,  and  mortgaged  for  an  unpaid  remainder  of  the  purchase 
price  to  an  amount  greater  than  the  purchase  money  invested,  was 
not  exempt.174 

Some  other  states,  like  New  York,  have  carried  the  exemption  of 
federal  pensions  further  than  Congress  has  done,  and  have  exempted 
pension  money  after  it  has  been  received,  and  even  property  in  which 
it  has  been  invested.175  But  these  exemptions  are  void  where  the  debt 
for  which  the  attachment  is  made  was  incurred  before  the  exemption 


170.  (1890),  119  N.  Y.  550,  555,  23  N.  E.  1108;  7  L.  R.  A.  557;  16  Am. 
St.  Rep.  855. 

171.  In  re  Stafford  (1905),  94  N.  Y.  Supp.  194. 

172.  Toole  v.  Board   (1897),  37  N.  Y.  Supp.  9,  43  N.  Y.  Supp.   1160, 
13  App.  Div.  471;  Benedict  v.  Higgins  (1915),  151  N.  Y.  Supp.  42,  165  App. 
Div.  611. 

173.  Toole  v.  Board,  sup. 

174.  In  re  Ellithorpe  (1901),  111  Fed.  163.    Hazel,  J.,  said:    "The  rule 
of  law  briefly  stated  is  that  if  the  investment  solely  of  the  pension  money 
is   in  the   nature  of  a  particular  kind  or  class,  intending  to  provide  either 
for  the  present  or  future  welfare  of  the  pensioner  and  of  his  family,  it  will 
be  protected  as  exempt." 

175.  Cal.   Code  Civ.   Proc.  Sec.  690;  Conn.  Gen.  St.  Sec.   1164;   Iowa 
Code,-  Sees.  4009,  4010;  Neb.  Code  Civ.  Proc.   Sec.  513b;   N.  Y.   Code  Civ. 
Proc.  Sec.  1393. 

20 


296  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

statute  was  passed,  even  though  the  pension  was  not  granted  until 
after  it  was  passed,  because  in  impairing  the  creditor's  security  for 
payment,  the  statute  impairs  the  obligation  of  his  contract.176  But  as  to 
debts  incurred  after  the  statute  was  passed,  the  statute  is  valid.177 

An  exemption  of  pension  money  in  the  hands  of  the  pensioner 
has  been  held  to  protect  a  deposit  in  a  mutual  savings  bank,  by  reason 
of  the  quasi-trust  relation  which  exists  between  such  a  bank  and  its 
depositors.178  And  the  protection  exists  after  the  pensioner's  death, 
preserving  the  property,  as  against  creditors,  for  the  benefit  of  the 
next  of  kin,  and  even,  it  has  been  held,  against  the  administrator's 
claim  for  fees.179 

Where  a  statute  expressly  exempts  "pension  money  invested"  the 
exemption  has  been  held  to  extend  not  only  to  property  bought  with 
pension  money,  but  to  its  increase,  and  to  property  obtained  in  exchange 
for  it.180  And  it  seems  that  if  property  so  bought  were  destroyed,  the 
exemption  would  extend  to  a  resulting  claim  against  a  wrongdoer  or 
an  insurer.181 

The  question  has  arisen  whether  the  exemption  is  available  only 
against  creditors  of  the  pensioner  himself.  In  Iowa,  a  homestead  which 
the  pensioner  conveyed  to  his  wife  was  held  to  be  exempt  from  her 
creditors,182  but  a  contrary  result  has  been  reached  in  New  York.183 

Exemption  from  Taxes 

Property  bought  with  pension  money  may  be  taxed.  To  exempt 
it  from  seizure  for  the  owner's  debts  does  not  exempt  it  from  seizure 
or  sale  for  unpaid  taxes  in  proceedings  against  the  property,  as  dis- 

176.  Foster  v.  Byrne  (1888),  76  Iowa  295,  35  N."  W.  513,  41  N.  W.  22. 

177.  Ratliff  v.  Elwell  (1909),  141  Iowa  312,  119  N.  W.  740,  20  L.  R.  A. 
(N.  S.),  223. 

178.  Price  v.  Savings  Soc.  (1894),  64  Conn.  362,  30  A.  139,  42  Am.  St. 
Rep.  198.    See  also  Cook  v.  Alice  (1903),  119  Iowa  226,  93  N.  W.  93;  Booth 
v.  Martin  (1913),  158  Iowa  434,  139  N.  W.  888  (A  homestead  bought  with 
proceeds   of  life  insurance   is  "the  avails"  of  the  policy,  within  a  statute 
exempting  the  avails  from  the  widow's  creditors). 

179.  Treadway  v.  Board  (1910),  14  Cal.  App.  75,  111  P.  111.    Contra, 
Beeclier  v.   Barber    (N.   Y.    1888),   6  Dem.    129.    Compare  Wolfe  v.  Wolfe 
(1911),  154  Mo.  App.  218,  134  S.  W.  33  (death  benefit  payable  to  adminis- 
trator without  liability  for  debts  is  subject  to  funeral  expenses). 

180.  Diamond  v.   Palmer   (1890),  79  Iowa  578,  44  N.  W.  819   (where 
a  mare  is  bought  and  stallion's  services  paid  for  with  pension  money,  her 
colt  is  exempt,  but  it  seems,  not  necessarily  all  her  future  colts);  Smith  v. 
Hill   (1891),  83   Iowa  684,  49  N..  W.   1043,  32  Am.  St.   Rep.  329   (horse  of 
greater  value   obtained   in  trade   for  horse   bought  with   pension  money); 
Dargan  v.  Williams  (1902),  66  Neb.  1,  91  N.  W.  862. 

181.  Yates  Co.  Bank  v.  Carpenter  (1890),  119  N.  Y.  550,  555,  23  N.  E. 
1108,  7  L.  R.  A.  557,  16  Am.  St.  Rep.  855. 

182.  Whinery  v.   McLeod    (1905),    127   Iowa   11,    102   N.   W.    132,   109 
Am.  St.  Rep.  364. 

183.  In  re  Stafford  (1905),  94  N.  Y.  Supp.  194,  105  App.  Div.  46. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  29? 

tinguished  from  proceedings  against  the  owner  to  recover  the  taxes  as 
money  he  owes.184  Even  where  it  is  specifically  exempted  from  taxes,, 
the  general  rule  applies  that  exemption  from  taxation  does  not  include 
exemption  from  assessment  for  local  improvement.  Land  bought  with 
pension  money  is  subject  to  such  assessment.185 

Transfer  of  Pension  Money  by  Insolvent  Pensioner 

If  an  insolvent  debtor  gives  away  his  property,  the  transfer  is  in 
general  void  as  against  his  creditors,  for  otherwise  their  just  claims 
would  be  defeated.  But  where  a  pension  is  by  statute  exempt  from 
attachment,  the  pensioner's  creditors  cannot  reach  the  money,  so  long 
as  their  debtor  sees  fit  not  to  collect  it.  If  instead  of  letting  it  remain 
uncollected,  he  authorizes  its  payment  to  another,  the  creditors  are  in 
no  worse  position.  Moreover,  a  pension  expressly  exempted  from 
seizure,  is,  it  may  be  said,  a  bounty  conferred  with  intent  to  place  it 
at  the  pensioner's  disposal,  free  from  claims  of  creditors,  at  least 
until  the  money  has  come  into  his  hands. 

It  is  a  result  of  the  act  of  Congress  exempting  federal  pensions 
from  seizure  by  legal  process  that  an  insolvent  pensioner  may  give  his 
pension  check  to  his  wife  or  to  any  other  person,  and  the  donee  may 
hold  the  proceeds  free  from  claim  of  the  pensioner's  creditors,  pro- 
vided the  gift  is  outright,  and  not  in  trust  for  the  pensioner.186  Where, 
however,  an  insolvent  pensioner  has  cashed  his  pension  check,  and 
thus  received  the  money,  which  becomes  liable  to  being  attached,  and 
then  as  a  separate  and  subsequent  transaction  gives  away  the  money 
or  its  proceeds,  the  gift  has  been  held  void  as  to  creditors.187 

But  the  latter  rule  probably  does  not  give  due  effect  to  the  act  of 
Congress  which  provides  not  only  that  pension  money  shall  be  exempt 
from  seizure  in  course  of  transmission,  but  that  it  "shall  enure 
wholly  to  the  benefit  of  the  pensioner."  In  Holmes  v.  Tallada,  Paxon, 
C.  J.,  said:  "We  think  the  rational  interpretation  of  this  language  is 
that  the  pensioner  may  use  the  money  in  any  manner  he  may  see 
proper  for  his  own  benefit  and  to  secure  the  comfort  of  his  family 

184.  Beers  v.  Langenfeld  (1910),  149  Iowa  581,  128  N.  W.  847. 

185.  In  re  Floyd  (1898),  53  N.  Y.  Supp.  709,  24  Misc.  Rep.  359;  Tucker 
v.  Utica  (1898),  54  N.  Y.  Supp.  855,  35  App.  Div.  173. 

186.  Tanner  v.  Tanner   (1884),  64  Iowa  690,  21   N.  W.  140;   Holmes 
v.  Tallada  (1889),  125  Pa.  St.  133,  17  A.  238,  3  L.  R.  A.  219,  11  Am.  St.  Rep. 
880;  Bullard  v.  Goodno  (1901),  73  Vt.  88,  50  A.  544,  Contra,  Sims  v.  Wai- 
sham   (Ky.   1888),  7  S.  W.  557;  Johnson  v.   Elkins   (1890),  90  Ky.   163,   13 
S.  W.  448,  8  L.  R.  A.  552. 

187.  Friend  v.  Garcelon  (1885),  77  Me.  25,  52  Am.  Rep.  739;  Berry  v. 
Berry  (1892),  84  Me.  541,  24  A.  957;  Triplett  v.  Graham  (1882),  58  Iowa  135, 
12N.  W.  143;  Baugh  v.  Barrett  (1886),  69  Iowa  495,  29  N.  W.  425. 


298  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

free  from  creditors."  In  Hissem  v.  Johnson,188  a  conveyance  to  pen- 
sioner's wife  of  land  bought  with  pension  money  was  held  good  against 
creditors.  Snyder,  J.,  said:  "It  (Congress)  may  give  the  pensioner 
the  absolute  right  to  dispose  of  the  bounty  by  gift  or  otherwise  to 
whom  he  choses,  without  regard  to  any  debts  he  may  owe,  or  the 
claims  of  his  creditors.  The  money  being  a  bounty  and  not  a  debt  due 
to  the  pensioner,  his  creditors  have  no  legal  rights  in  regard  to  it 
*  *  *  at  least  until  they  have  acquired  such  legal  right  or  claim  by 
some  process  of  the  state  law.  If  such  process  is  not  resorted  to  and 
such  right  acquired  before  the  pensioner  has  disposed  of  the  pension 
or  its  proceeds,  the  right  to  do  so  is  lost.  *  *  *  The  money  is  no 
longer  subject  to  the  debts  of  the  pensioner  because  it  has  rightfully 
passed  from  his  hands  by  the  power  given  to  him  over  it  by  the  gov- 
ernment, his  benefactor." 

This  doctrine  seems  to  have  received  the  approval  of  the  United 
States  Supreme  Court,  which  has  said  :18£ 

"When  the  money  has  been  paid  to  him  it  has  'inured  wholly  to 
his  benefit' ;  and  is  liable  to  seizure  as  opportunity  presents  itself.  The 
pensioner,  however,  may  use  the  money  in  any  manner,  for  his  own 
benefit  and  to  secure  the  comfort  of  his  family,  free  from  the  attacks 
of  creditors,  and  his  action  in  so  doing  will  not  be  a  fraud  upon  them." 

V.     PERSONS   ENTITLED    TO   PENSIONS.     CONSTRUC- 
TION OF  PENSION  ACTS 

a.     Members  of  Departments 

Where  a  pension  fund  is  established  for  members  of  a  police  or 
fire  department,  the  term  "member"  includes  the  superintendent  or 
head  of  the  department.190  It  is  not  confined  to  members  appointed 
under  civil  service  rules.101  It  seems  it  includes  all  whose  membership 
in  the  department  is  provided  for  by  ordinance,  who  are  on  the  rolls 
as  members,  and  are  subject  to  the  orders  of  the  department  head.191 
Hence  linemen,  station  watchmen  and  veterinary  surgeons,  as  well  as* 
fire  fighters,  are  members  of  a  fire  department.193  So  also  are  "extra 


188.  (1886),  27  W.  Va.  327. 

189.  Mclntosh  v.  Aubrey  (1902),  185  U.  S.  122,  per  McKenna,  J. 

190.  Moffatt  v.  Lowell   (1913),  215  Mass.  92,  102  N.  E.  344  (at  least 
where  the  superintendent  has  powers  of  a  policeman,  though  he  is  the  officer 
who  recommends  for  retirement  on  pension);   People  v.  Coler  (1903),  173 
N.  Y.  103,  65  N.  E.  956  (semble). 

191.  People  v.  Coler,  Supra. 

192.  Fickett  v.  Boston  Firemen's  Relief  Fund   (1915),  220  Mass.  319, 
107     N.  E.  957. 

193.  Fickett  v.   Boston   Firemen's   Relief  Fund,  supra;    Leffingwell  v. 
Kiersted  (1907),  74  N.  J.  Law  407,  65  A.  1029. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  299 

men"  regularly  appointed  at  a  fixed  salary,  though  they  do  not  live 
at  the  engine  house,  and  though  they  engage  in  other  occupation.194 
But  where  a  statute  provides  that  no  substitutes  shall  be  deemed  mem- 
bers of  a  fire  department  unless  regularly  appointed  according  to  the 
department  rules,  a  person  appointed  merely  to  take  the  place  of  a 
fireman  temporarily  absent  is  not  a  member.195  Members  of  a  volun- 
teer fire  company,  who  by  ordinance  are  entitled  to  receive  a  stated 
sum  per  hour  for  time  spent  in  fighting  fires,  constitute  a  "paid  fire 
department,"  though  their  attendance  at  fires  is  voluntary ;  but  it  is 
not  a  fire  department  "having  the  management  of  fire  apparatus,"  if 
the  apparatus  is  in  sole  charge  of  city  officials,  though  the  officials 
have  to  be  chosen  from  members  of  the  volunteer  department.196  It 
has  been  held  in  California  that  a  policeman  retired  from  service  at 
sixty,  on  pension,  but  required  to  report  at  stated  times,  and  bound 
to  perform  duty  if  called  on  in  emergency,  is  still  a  member  of  the 
department,  within  the  meaning  of  a  statute  providing  a  pension  for 
'widows  of  members  who  thereafter  die ;  the  police  laws  indicating  that 
membership  ceased  only  on  resignation  or  dismissal.197 

b.  Officers 

The  Illinois  act  of  1915  for  pensions  for  officers  and  employes  of 
counties  of  over  150,000,  does  not  include  elected  public  county  officers. 
The  word  ''employes"  which  is  used  in  the  body  of  the  act  to  denote 
the  persons  to  be  pensioned  is  inapplicable  to  such  officers.  But  it 
does  include  other  officers  whose  salaries  are  subject  to  the  legislature's 
control.198 

c.  Unmarried  Dependents 

Prima  facie,  it  is  said,  the  word  "unmarried"  is  to  be  understood 
as  meaning  "never  having  been  married,"  but  slight  circumstances  may 
suffice  to  show  that  it  has  a  different  meaning.199 

A  law  giving  a  surviving  pension  to  a  mother  or  unmarried  sis- 
ter, includes  a  sister  who  at  the  pensioner's  death  is  a  widow.200  A 

194.  State  v.  Knowles  (1911),  145  Wis.  523,  130  N.  W.  451;  Parke  v. 
Board  (1917),  34  Cal.  App.  623,  168  P.  581. 

195.  State  v.  Trustees  (1896),  18  Ohio  Cir.  Ct.-  Rep.  887,  9  Ohio  Cir. 
Dec.  854. 

196.  Continental  Hose  Co.  v.  Fargo  (1908),  17  N.  D.  5,  114  N.  W.  834. 

197.  Kavanaugh  v.  Board  (1901),  134  Cal.  50,  66  P.  36.  But  in  Missouri, 
it  has   been   held  that  a  policeman   retired  on  a  service  pension   is   not  a 
member  of  the  department  within  the  meaning  of  the  charter  of  a  relief 
association  by  which  the  pension  was  paid.    Price  v.  St.  Louis  Police  Relief 
Assn.  (1901),  90  Mo.  App.  210.    And  see  Cases  in  notes  127,  128,  129. 

198.  Helliwell  v.  Sweitzer  (1911),  278  111.  248. 

199.  Miller  v.  Balke  (1897),  167  111.  150;  Peters  v.  Balke   (1897),  170 
111.  304,  312,  and  cases  cited. 

200.  Mott  v.  Scanlan  (1912),  19  Cal.  App.  250,  125  P.  762. 


306  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

law  for  pensioning  "the  widow  of  any  soldier  *  *  *  while  she  remains 
unmarried"  does  not  authorize  a  pension  to  a  soldier's  widow  who  has 
remarried  and  been  widowed  again.201 

d.     Children 

When  a  statute  gives  rights  to  children  in  succession  to  their 
parents,  a  question  sometimes  arises  whether  the  word  "children" 
includes  children  of  children  deceased.  In  Walter  v.  Cotton,202  an  act 
of  Congress  which  provided  that  on  the  death  of  a  person  entitled  to 
pension  the  amount  of  the  pension  should  be  paid  to  his  children,  was 
held  to  include  the  children  of  a  child  deceased,  who  would  divide 
among  themselves  the  share  their  parent  would  have  taken  if  living. 
It  was  said  that  Congress  "will  be  presumed  to  have  acted  under  the 
ordinary  influences  which  lead  to  an  equitable  and  not  a  capricious 
result.  And  where  the  language  used  may  be  so  construed  as  to  carry 
out  a  benign  policy,  within  the  reasonable  intent  of  Congress,  it  should 
be  done."  This  case  was  cited  approvingly  as  to  the  general  principle- 
of  liberal  construction  in  Ryan  v.  Foreman,203  but  some  other  courts 
have  questioned  the  correctness  of  the  decision. 2(H 

A  child  legally  adopted  is  the  child  of  the  adopting  parent  within 
the  prima  facie  meaning  of  an  Illinois  pension  law,  for  the  Illinois 
statute  of  adoption  provides  that  an  adopted  child  shall,  with  certain 
exceptions,  be  "to  all  legal  intents  and  purposes  the  child  of  the 
adopting  parents."205  The  legislature,  however,  may  withhold  its 
bounty  from  adopted  children,  if  it  sees  fit,  and  where  its  language 
shows  intent  to  do  so,  it  will  be  given  effect. 

A  child  born  out  of  wedlock  becomes  a  child  of  its  father  within 
the  meaning  of  a  pension  law  when  legitimized  by  the  marriage  of  its 
parents.206 

Whether  the  word  "child"  means  only  a  minor  child,  and  whether 
it  is  limited  to  a  class  of  children  elsewhere  enumerated  in  the  statute 
are  questions  of  interpretation.  Where  a  law  provided  pensions  for 
children  under  sixteen  of  policemen  killed  on  duty,  and  in  case  of 
death  from  any  other  cause,  a  death  benefit  of  $1000  for  children,  or 


201.  State  v.  Verner  (1889),  30  So.  Car.  277,  9  S.  E.  113. 

202.  (1856),  19  How.  355. 

203.  (1913),   181   111.  App.  262.    See   also   Eshleman's   Appeal    (1873), 
74   Pa.   St.  42,   where  a  statute  charging  children  with  advancements  was 
held  applicable  to  grandchildren. 

204.  Burgess  v.  Hargrove  (1885),  64  Tex.  110  (widow  inherits  as  on 
death   without   children,   though   deceased  leaves   a   grandchild);    Peeler  v. 
Peeler   (1890),  68  Miss.   141,  8  So.  392   (homestead  descending  to  children 
does  not  descend  to  child  of  deceased  child,  living  with  family). 

205.  Ryan  v.  Foreman  (1914),  262  111.  175. 

206.  See  U.  S.  v.  Skam  (1837),  5  Cranch  C.  C.  367,  Fed.  Cas.  No.  16, 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  301 

if  no  children,  for  a  dependent  mother,  it  was  held  that  children  meant 
only  minors,  and,  it  seems,  minors  under  sixteen.207  But  where  chil- 
dren of  a  constable  killed  on  duty  were  to  receive  allowances  to  cease 
at  fifteen,  and  on  death  under  certain  other  circumstances  an  annuity 
might  be  granted  to  any  of  his  children,  it  was  held  that  the  annuity 
was  not  limited  to  minor  children.208 

An  inequality  with- which  some  Illinois  pension  laws  are  charge- 
able, though  in  a  lesser  degree,  was  pointed  out  in  a  Washington  case, 
in  which  it  was  said  :209  "Incongruous  as  it  may  seem,  the  right  of  a 
deceased  fireman's  children  to  the  benefit  of  the  fund  ceases  at  the 
age  of  sixteen  years,  whether  dependent  or  not,  while  dependent  par- 
ents, a  dependent  sister,  and  even  dependent  brothers  until  they  reach 
the  age  of  majority  may  have  the  benefit  of  the  fund." 

e.     Other  Dependents 

Where  dependency  is  defined  as  being  without  adequate  means 
of  support,  it  has  been  held  that  a  woman  is  dependent  if  without 
means  to  support  herself  in  her  reasonable  and  customary  mode  of 
living,  and  that  where  her  only  means  of  support  is  from  invested 
capital,  it  is  inadequate  if  the  income  it  can  be  made  to  produce  is 
inadequate,  though  the  principal  would  suffice  to  maintain  her  for  a 
considerable  time.210  A  son  contributes  to  his  mother's  support  when 
he  allows  her  to  occupy  his  farm  and  use  what  she  raises  on  it.210" 
Under  the  Illinois  law  of  1909  which  provides  a  pension  for  a  widow, 
child  under  sixteen,  or  "dependent  parent  upon  such  policeman  for 
their  maintenance,"  it  is  not  necessary  that  the  widow  be  dependent.211 

The  rules  of  the  Policemen's  Benevolent  Association  of  Chicago 
limit  the  relief  to  the  immediate  family  of  members.  A  brother  who 
lives  in  the  same  house  may  be  one  of  the  immediate  family,  and  an 
adult  daughter  residing  elsewhere  is  within  the  class  intended,  because 
she  is  of  the  next  of  kin,  and  because  she  would  share  in  the  benefits 
of  a  certificate  made  payable  to  the  member  himself.212  The  word 
"mother"  used  in  a  rule  of  an  association  for  the  relief  of  firemen, 
their  families  and  dependents,  which  provides  that  a  fireman  may  name 
as  beneficiary  his  mother  or  certain  other  relatives,  embraces  within 

308;  Ryan  v.  Foreman  (1914),  262  111.  175,  189. 

207.  Mackey  v.  Mott  (1914),  25  Cal.  App.  110,  142  P.  1082. 

208.  Campbells  v.  Glasgow  Police  Commissioners  (1895),  32  Scottish 
Law  Reporter  497. 

209.  Longfellow    v.    Seattle    (1913),    76   Wash.    509,    136    P.    855,    per 
Fullerton,  J. 

210.  U.  S.  v.  Purdy  (1889),  38  Fed.  902. 

211.  People  v.  Armstrong   (1915),   196  111.  App.   199. 

212.  Xorv.-egian    Old   People's    Home    Society  v.   Wilson    (1898).    176 
111.  94. 


302  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

its  meaning  a  stepmother  who  is  a  member  of  the  household,  because 
she  is  within  the  class  to  be  relieved ;  but  as  used  in  a  rule  which  pro- 
vides that  if  no  beneficiary  is  named,  the  benefit  shall  be  payable  to 
the  fireman's  mother,  the  word  "mother"  means,  it  seems,  only  mother 
by  blood.213 

f.     Rights  of  Survivors  in  Succession 

Where  a  survivor's  pension  is  payable  to  the  widow,  or  if  there 
is  no  widow,  to  children,  and  deceased  leaves  a  widow  and  children, 
the  pension  continues  to  the  children  after  the  widow's  death.214  On  the 
same  principle,  under  the  United  States  pension  laws  by  which  arrears 
due  a  deceased  pensioner  are  not  part  of  his  estate,  but  go  to  his  widow, 
or  if  no  widow,  to  his  children,  where  the  widow  dies,  pension  money 
due  her  is  not  liable  for  her  debts,  but  is  payable  to  the  children.215 
But  children  have  no  interest  in  pension  money  paid  their  mother  or 
in  property  she  buys  with  it.216  This  is  so  even  though,  as  under  U.  S. 
R.  S.  Sec.  4703,  the  widow  receives  two  dollars  a  month  more  as  pen- 
sion "for  each  child"  under  sixteen.  The  payment  is  to  the  widow  for 
her  own  use  by  reason  of  her  having  a  child  to  support,  and  is  not 
for  the  use  of  the  child,  and  the  child  when  of  age  is  not  entitled  to 
recover  the  money  from  the  mother.217  Where  a  death  benefit  is  pay- 
able to  the  legal  representative  exempt  from  debts  of  the  deceased, 
the  administrator  is  entitled  to  receive  the.  money.  He  may  pay 
funeral  expenses  from  it,  and  the  surplus  is  distributed  according  to 
the  law  of  the  state,  so  that  if  the  widow's  statutory  allowance  exhausts 
the  surplus,  the  decedent's  mother  gets  nothing.218 

A  guardian  whose  ward  is  entitled  to  a  pension  is  entitled  to  be 
placed  upon  the  pension  roll  as  guardian,  and  to  receive,  the  pension 
money.219 

A  wife's  right  to  pension  is  not  impliedly  dependent  on  her  hus- 
band's consent,  though  the  fund  is  made  up  of  deductions  from  his 
and  others'  salaries.  Whatever  her  right  to  insure  his  life  without  his 
consent,219a  it  is  no  defense  to  her  claim  for  a  widow's  pension,  that 


213.  Jones   v.   Firemen's   Relief   Assn.    (1912),    151   Wis.   215,    138  N. 
W.  618. 

214.  Ryan  v.  Foreman  (1914),  262  111.  175  (policemen's  act  of  1887). 

215.  Pinson  v.  Sanders  (1906),  29  Ky.  L.  Rep.  715,  96  S.  W.  444. 

216.  Jones  v.  Porter  (1895),  Tex.  Civ.  App.,  30  S.  W.  1119. 
217     Creekbaum  v.  Sohner  (1894),  1  Ohio  Nisi  Priiis  Rep.  34. 

218.  Wolfe  v.  Wolfe  (1911),  154  Mo.  App.  218,  134  S.  W.  33  (railway 
postal  clerk  death  benefit  under  33  U.  S.  Stat.  436). 

219.  Ryan  v.  Foreman  (1913),  181  111.  App.  262,  affirmed   (1914),  262 
111.  175. 

219a.     See  Chicago  etc.  Spc.  v.  Dyon  (1898),  79  111.  App.  100,  105. 


ILLINOIS  PENSION  LAWS  COMMISSION,   1918-1919 


303 


her  husband  did  not  want  her  to  have  it,  and  that  he  was  paid  his 
salary  without  deduction  for  the  fund.2196 

g.     Persons  Retired  from  Service 

As  it  is  presumably  not  intended  to  award  pensions  by  reason  of 
service  which  has  ceased,  a  provision  for  pensions  based  on  service 
presumably  refers  only  to  service  of  present  or  future,  not  of  former, 
officers  or  employes.  A  statute  providing  for  a  pension  to  "any  teacher 
who  has  taught  in  the  public  schools  *  *  *  for  a  period  of  forty 
years  previous  to  the  date  when  this  act  becomes  operative"  does  not 
contemplate  pensions  to  teachers  already  retired.  "A  fund  for  the 
benefit  of  teachers,  in  the  natural  use  of  the  term,  refers  to  active 
teachers,  not  to  retired  teachers."220 

And  a  provision  for  retirement  on  pension  after  twenty  years 
service  is  clearly  inapplicable  to  persons  who  retired  before  the  act 
was  passed.221 

On  the  ground  that  a  statute  presumably  does  not  intend  to  confer 
rights  in  relation  to  matters  altogether  past,  a  New  York  statute  pen- 
sioning the  widow  of  any  member  of  the  police  force  who  had  died  or 
should  thereafter  die  after  ten  years  service,  was  held,  to  mean  by  the 
phrase  member  ivlio  had  died  one  who  had  died  while  still  a  member, 
and  not  one  who  had  died  in  retirement.221  This  case  was  approvingly 
cited  by  the  Illinois  Supreme  Court  in  a  case  in  which  the  amendment 
of  1899  to  the  police  pension  law  of  1887,  which  amendment  continued 
to  their  widows  the  pensions  of  policemen  retired  after  twenty  years 
service,  was  held  not  to  refer  to  widows  whose  husbands  had  died 
before  the  amendment  went  into  effect.223  On  the  other  hand,  where  a 
pension  is  provided  for  an  officer  "whenever  he  shall  have  served 
twenty  years,"  officers  in  service  when  the  act  takes  effect  are  included, 
and  the  required  service  need  not  be  in  the  future.224  An  officer  who 
has  already  served  twenty  years  may  retire  at  once.225 

219b.  Matter  of  Tobin  (1900),  164  N.  Y.  532,  58  N.  E.  650,  affirming 
53  App.  Div.  453,  66  N.  Y.  Supp.  97.  See  also  Dionne  v.  Queen  (1895),  24 
Canada  Sup.  Ct.  451  (where  pension  is  payable  on  death  to  widow,  pensioner 
cannot  by  assignment  defeat  widow's  right). 

220.  State  v.  Board  of  Education  (1914),  88  Conn.  430,  91  A.  529. 

221.  Clarke  v.  Police  Board  (1900),  127  Cal.  550,  59  P.  994. 

222.  People  v.  Partridge  (1902),  172  N.  Y.  305,  65  N.  E.  164,  reversing 
74  App.  Div.  620,  77  N.  Y.  Supp.  1137. 

223.  Eddy  v.  Morgan  (1905),  216  111.  437,  reversing  118  111.  App.  138. 
As  to  the  constitutionality,  so  far  as  .concerns  policemen  already  retired, 
of  the   amendment   of   1899,   ami   of  the   amendment   of   1907,   intended   to 
neutralize  the  decision  in  Eddy  v.  Morgan,  see  ante  notes  19-21b. 

224.  Hess   v.    Board    (1913),    188   111.   App.   8:    People   v.    Armstrong 
(1915),  196  111.  App.  199;  State  v.  Love  (1914),  95  Neb.  573,  145  N.  W.  1010. 

225.  People  v.   Abbott    (1916),  274  111.   380;   Pearce  v.   Board   (1914), 
85  N.  J.  Law  520,  89  A.  1026;  Van  Dyke  v.  Board  (1916),  88  N.  J.  Law  492, 


304  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

h.     Persons  Entitled  to  Benefits  of  Prior  Laws 

A  provision  that  persons  entitled  to  pensions  under  a  former  act 
shall  be  entitled  to  pensions  under  a  later  one  includes  not  only  persons 
drawing  pensions  under  the  former  law,  but  those  who  were  entitled 
to  obtain  pensions  under  it  on  application.226  But  it  does  not  mean 
that  persons  who  had  only  partially  completed  the  requirements  of  the 
old  law  may  on  completing  them  have  pensions  under  the  new  law. 
It  does  no  more  than  admit  to  pensions  those  who  had  already  com- 
pleted the  former  requirements.227  And  an  act  which  abolishes  exist- 
ing disability  pensions,  creates  a  new  disability  fund  and  directs  the 
board  to  continue  the  pensions  of  past  pensioners  who  would  be 
entitled  under  the  new  law,  does  not  continue  pensions  simply  because 
originally  granted  for  causes  recognized  by  the  new  law.228  There  is 
no  right  to  a  continued  pension  unless  the  disability  continues. 

VI.     CONDITIONS  PRELIMINARY  TO  THE  RIGHT  TO  A 
PENSION 

a.     Disability  and  Death 

On  the  question  what  constitutes  disability  there  is  little  authority. 
In  construing  a  law  which  authorized  the  compulsory  retirement  on 
pension  of  policemen  who  after  twenty  years  service  were  found  by 
surgeons  to  be  unfit  for  duty,  the  New  York  Court  of  Appeals  said : 
"Fitness  for  police  duty  means  the  ability  to  discharge  with  average 
efficiency  the  duty  of  the  grade  to  which  the  member  belongs."  The 
court  held  that  a  finding  of  unfitness  for  full  duty  was  not  equivalent 
to  a  finding  of  unfitness  for  duty,  and  that  it  did  not  authorize 
retirement.229 

As  unfitness  for  full  duty  does  not  necessarily  constitute  disability, 
so  fitness  for  partial  duty  does  not  of  itself  constitute  fitness  for  duty, 
and  a  retirement  for  disability  may  be  sustained,  though  the  officer  is 
fit  for  partial  duty.230  But  the  meaning  of  the  phrase  "fit  for  duty" 
may  vary  with  the  context,  and  if  it  is  provided  that  a  fireman  dis- 


96  A.  671.  Compare  State  v.  Ziegenhein  (1898),  144  Mo.  283,  45  S.  W. 
1099,  66  Am.  St.  Rep.  420  (where  right  to  pension  after  twenty  years  service 
is  a  term  of  contract  of  employment,  it  means .  twenty  years  of  future 
service). 

226.  O'Connor  v.   Trustees   Firemen's   Pension  Fund   (1910),   155   111. 
App.  460,  affirmed  247  111.  54. 

227.  Pecoy  v.  Chicago  (1914),  265  111.  78. 

228.  Head  v.  Jacobs  (1912),  150  Ky.  290,  150  S.  W.  349. 

229.  People  v.  McAdoo  (1906),  184  N.  Y.  268,  77  N.  E.  17,  affirming 
109  App.   Div.  892,  96  N.  Y.  Supp.  868,  and  48  Misc.   Rep.  420,  95   N.   Y. 
Supp.  511. 

230.  Hodgins  v.  Bingham  (1908),  128  App.  Div.  151,  112  N.  Y.  Supp. 
543. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  305 

abled  for  active  duty  only  shall  be  employed  in  another  position,  it 
seems  that  if  fit  for  inactive  service  he  cannot  be  retired  as  "unfit  for 
duty,"  yet  he  may  be  retired  where  retirement  is  authorized  in  case  of  a 
fireman  unfit  for  the  performance  of  "his  duties."231 

Continuance  of  Disability 

Disability  continues  when  it  recurs  after  return  to  work.  Relief 
payable  "during  the  continuance  of  his  disability"  is  payable  fo'r  the 
time  the  person  disabled  is  kept  out  of  work  by  his  injury,  though  the 
period  is  not  continuous.232 

"Death"  Within  the  Meaning  of  a  Pension  Law 

Where  a  policeman  committed  suicide,  while  sane,  it  was  held  that 
his  widow  could  not  have  a  pension  as  for  his  "death,"  and  the  court 
suggested  that  it  would  also  be  so  if  he  were  hanged  for  murder.233  The 
reason  assigned  was  that  the  statute  presumably  was  not  intended  to 
cover  the  case  because  it  is  against  public  policy  to  hold  out  such  an  in- 
ducement to  suicide.  The  court  relied  on  decisions  under  policies  of  life 
insurance  where  death  occurs  by  suicide  while  sane,234  or  by  execution 
for  crime.235 

But  the  analogy  seems  unsatisfactory.  So  far  as  the  insurance 
cases  go  on  the  ground  that  the  contract  of  insurance,  if  intended  to 
cover  sane  suicide  or  death  at  the  hands  of  the  law,  is  void  as  against 
public  policy,  they  are  inapplicable,  for  the  legislature's  grant  of  the 
pension  concludes  the  question  of  policy,  and  the  court  must  enforce 
the  statute  according  to  its  meaning.  So  far  as  the  insurance  cases  go 
on  the  ground  that  insurance  is  meant  only  to  cover  accidental  death, 
and  that  death  by  suicide,  sane,  is  not  accidental,  their  reasoning  has 
little  application  to  a  pension  law.  Insurance  goes  on  the  ground  of 
a  calculation  of  chances  of  accident,  for  which  the  premium  is  paid 
as  an  equivalent.  To  apply  the  rules  of  insurance  to  pensions  would 
deny  relief  to  the  widow  if  a  policeman  when  entering  the  service  con- 
cealed or  misrepresented  matters  material  to  his  expectation  of  life. 
Pensions  are  offered  not  as  insurance  but  as  a  bounty  to  induce  service 
and  to  relieve  distress.  A  court  goes  a  great  way  when  it  reads  into 
a  statutory  provision  for  a  policeman's  dependents  an  exception  of 
death  by  suicide  on  the  ground  that  it  thinks  it  impolitic  to  grant  a 


231.     People  v.  Hayes  (1900),  122  N.  Y.  Supp.  104,  66  Misc.  531. 
232     Pa.    Co.    v.    Chapman    (1806),    220    111.    428    (fund    for    railroad 
employes). 

233.  Rudolph  v.  U.  S.  (1911),  36  App.  D.  of  Col.  379. 

234.  Ritter  v.  Mutual  Life  Ins.  Co.  (1898),  169  U.  S.  139. 

235.  Amicable  Society  v.   Holland   (Eng.   1830),  4  Bligh   (N.  S.),  194, 
2  Dow  &  C.  1;  Burt  v.  Union  Central  Life  Co.  (1902),  187  U.  S.  362;  North- 
western Mt.  Life  Co.  v.  McCue  (1912),  223  U.  S.  234. 


306  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

pension  in  such  a  case.  At  any  rate,  this  reasoning  would  hardly  be 
adopted  in  Illinois,  for  Illinois  enforces  policies  of  insurance  payable 
to  the  widow  of  a  man  who  is  hanged  for  murder,-36  or  who  commits 
suicide  when  of  sound  mind.237  Whether  the  right  tp  pension  would 
be  lost  because  of  fraud  if  a  policeman's  wife  murdered  him  to  get 
the  pension  money,  or  he  committed  suicide  for  that  object,  especially 
if  he  secured  his  appointment  with  the  purpose  of  doing  so,  is  a 
different  question.238 

Connection  Between  Injury  and  Death 

When  an  officer  receives  an  injury  which  contributes  to  his  death, 
a  doubt  may  arise  whether  the  connection  between  injury  and  death 
is  close  enough  to  fall  within  the  meaning  of  a  statute  providing  pen- 
sions for  death  from  such  injury.  This  involves  a  question  of  fact, — 
What  was  the  character  of  the  connection  between  injury  and  death 
in  the  particular  case?  and  also  a  question  of  interpretation — What 
character  of  connection  does  the  statute  mean  to  require?  The  answer 
consequently  may  vary  with  the  words  which  the  statute  employs.  A 
law  provided  for  pensioning  the  widow  of  a  policeman  "killed  while 
in  the  performance  of  duty."  A  policeman  while  in  the  performance 
of  duty  received  an  injury  which  seven  years  later  resulted  in  dis- 
ability and  caused  his  retirement.  Two  years  afterward  he  died  of 
the  injury.  The  court  held  that  a  death  so  remote  was  not  within  the 
meaning  of  being  killed  while  in  the  performance  of  duty,  but  said 
that  it  was  not  necessary  that  death  should  occur  on  duty,  and  that  a 
death  by  reason  of  and  soon  after  the  injury  would  suffice.  It  was 
suggested  that  in  analogy  with  the  law  of  homicide,  it  might  be  neces- 
sary and  sufficient  that  death  occur  within  a  year  and  a  day.230  Where 
a  fireman  whose  back  was  broken  by  the  overturning  of  a  wagon  on 
the  way  to  a  fire,  soon  after  went,  insane  and  committed  suicide  from 
pain,  it  was  ruled  that  he  was  killed  while  in  performance  of  duty,  the 
injury  causing  the  death  in  a  fairly  direct  way.240 

236.  Collins  v.  Mutual  Life  Ins.  Co.  (1908),  232  111.  37.     • 

237.  Grand  Legion  Select  Knights  v.  Beaty  (1906),  224  111.  346. 

238.  A  policy  of  life  insurance  is  unenforcible  for  fraud  when  obtained 
with  intent  to  commit  suicide;  Smith  v.  Nat.  Benefit  Soc.  (1890),  123  N.  Y. 
85;   and  unenforcible   in   favor   of  a   beneficiary   who   murders   the   insured. 
Schreiner  v.  High  Court  etc.  (1890),  35  111.  App.  576  (semble);  Ins.  Co.  v. 
Armstrong  (1886),  117  U.  S.  591;  Schmidt  v.   Life  Assn.   (1901),   112  Iowa 
41,  83  N.  W.  800,  51  L.  R.  A.   141,  84  Am.  St.  Rep.  323;  Prince  of  Wales 
Ins.    Co.   v.   Palmer    (1858),   25    Beav.   605;    Cleaver   v.   Reserve    Life  Assn. 
(1892),  1  Q.  B.  147.     In  the  latter  case,  the  money  goes  to  the  next  of  kin 
excluding  the  murderer.    Schmidt  v.  Life  Assn.   (sup.);  Cleaver  v.  Reserve 
Life   Assn.    (sup.).     But    if    he    was    insane,   the    beneficiary   may   have    the 
money.    Holdom  v.  Ancient  Order  etc.   (1896),  159  111.  619. 

239.  Edwards  v.  Swigert  (1911),  15  Cal.  App.  503,  115  P.  256. 

240.  Baker  v.  Board  (1912),  18  Cal.  App.  433,  123  P.  344. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  307 

Circumstances  of  Injury 

Under  some  pension  laws  of  Illinois  and  other  states,  there  is  no 
right  to  a  pension  for  death  or  disability  caused  in  service,  unless 
the  cause  was  in  some  way  connected  with  performance  of  duty,  or 
unless  (under  some  statutes)  it  arose  from  natural  causes.  Direct 
violence  contributed  to  by  human  agency  is  not  within  the  meaning 
of  "natural  cause."  Thus  death  from  injury  in  a  railroad  accident  is 
not  death  from  a  natural  cause.241  Nor  is  death  from  suicide  by  shoot- 
ing when  insane.242 

An  injury  is  not  received  "in  service  and  in  the  line  of  duty" 
merely  because  it  is  received  while  on  duty.  It  must  have  been  received 
by  reason  of  being  on  duty.243  So  where  an  insane  policeman  commits 
suicide  while  on  duty,  it  is  not  death  "in  the  line  of  duty."244  But  an 
employe  at  work  upon  the  streets  is  disabled  "in  the  line  of  duty,"  if 
disabled  by  being  run  over  by  a  street  car,  where  it  is  his  work  which 
exposes  him  to  the  injury.245  And  a  policeman  injured  by  vaulting 
over  a  wooden  horse  in  a  gymnasium  is  injured  "in  the  execution  of 
his  duty,"  if  the  exercise  is  prescribed  by  the  police  regulations.246 

If  the  pension  is  conditioned  on  injury  "while  in  the  performance 
of  duty,"  it  is  a  fortiori  complied  with  when  the  injury  is  received  on 
duty  and  by  reason  of  being  on  duty.247 

241.  Slevin  v.  Board  (1898),  123  Cal.  130,  55  P.  785,  44  L.  R.  A.  114. 

242.  Hutchens  v.  Covert  (1906),  39  Ind.  App.  382,  78  N.  E.  1061. 

243.  Rhodes  v.  U.  S.  (1897),  79  Fed.  740  (disease  contracted). 

244.  Hutchens  v.  Covert  (1906),  39  Ind.  App.  382,  78  N.  E.  1061. 

245.  Engstrom  v.  Seattle  (1916),  92  Wash.  568,  159  P.  816. 

246.  Gummerson    v.    Toronto    Police    Benefit    Fund    (1905),    11    Ont. 
L.  R.  194,  5  Ont.  Weekly  Rep.  581. 

247.  State  v.  Board  (1909),  138  Wis.  133,  119  N.  W.  806,  20  L.  R.  A. 
(N.  S.)   1175  (pneumonia  contracted  by  exposure);  Baker  v.  Board  (1912), 
18  Cal.  App.  433,  123  P.  344. 

In  Hutchens  v.  Covert  (1906),  39  Ind.  App.  382,  78  N.  E.  1061,  it  was 
held  that  death  by  suicide  while  on  duty  was  not  death  caused  "while  in 
the  line  of  duty."  The  court  seems  to  have  overlooked  the  fact  that  the 
reference  is  not  to  injury  that  happens  in  the  line  of  duty  but  to  injury 
that  happens  while  the  man  is  in  the  line  of  duty.  It  cites  the  case  of  Law- 
rence v.  People  (1900),  188  111.  407,  413,  to  the  effect  that  words  in  an 
earlier  statute  may  be  construed,  if  they  will  bear  that  meaning,  in  the 
same  sense  as  different  words  used  in  a  later  act  relating  to  the  same 
subject  so  as  to  bring  the  statutes  into  harmony.  But  it  misapplies  the 
doctrine  by  using  it  where  the -later  statute  repealed  the  earlier  one.  The 
legislature  in  changing  the*  language  probably  intended  to  change  the 
meaning.  At  least  there  is  no  ground  to  assume  that  different  words  were 
used  only  to  make  plain  the  meaning  of  earlier  words  when  it  is  a  meaning 
that  the  earlier  words  do  not  naturally  bear.  See  Venable  v.  Schafer  (1906), 
28  Ohio  Cir.  Ct.  Rep.  202.  The  principle  was  properly  applied  in  Rudolph 
v.  U.  S.  (1911)  36  App.  D.  of  C.  379,  where  a  statute  which  provided  police 
pensions  in  specified  classes  of  injury  was  construed  to  mean  only  injuries 
of  such  classes  when  received  in  line  of  duty,  because  by  an  earlier  statute 
the  pension  fund  was  established  for  the  benefit  of  policemen  injured  in  line 
of  duty. 


308  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

But  work  connected  with  is  not  necessarily  a  part  of  the  perform- 
ance of  duty.  A  policeman  killed  by  the  accidental  discharge  of  his 
pistol  while  he  was  cleaning  it  at  home,  is  not  necessarily  killed  in  the 
performance  of  duty.248 

Where  pensions  were  established  for  firemen  whose  duties 
required  active  service  in  the  extinguishment  of  fires,  if  incapacitated 
in  the  discharge *of  such  duty,  and  thereunder  a  pension  was  provided 
for  firemen  injured  in  the  discharge  of  duty,  it  was  held  that  the  duty 
intended  was  the  hazardous  active  service  of  extinguishing  fire,  and  that 
a  fireman  who  fell  from  a  trolley  car  on  his  way  home  to  supper  was 
not  on  such  duty,  though  in  uniform  and  in  duty  bound  to  answer  any 
alarm  of  fire.249 

Injury  may  include  contracting  disease.  Death  from  pneumonia 
contracted  by  exposure  in  performing  duty  is  death  resulting  from 
"being  injured"  while  performing  duty.250 

b.     Age  and  Length  of  Service 
Service  in  the  Past 

An  act  to  provide  pensions  for  persons  who  "shall  have  served" 
for  a  stated  term  presumably  does  not  require  that  the  service  be  in 
the  future.  Service  rendered  before  the  act  took  effect,  as  well  as 
future  service,  may  be  counted  to  make  up  the  term.251 

The  police  pension  act  for  cities  of  5000  to  100,000  requires  the 
board  to  direct  that  a  policeman  who  has  served  twenty  years  shall 
be  paid  a  pension  "after  becoming  fifty  years  of  age  *  *  *  and  his 
service  shall  have  ceased."  It  entitles  to  pension  a  policeman  who  is 
fifty  and  has  served  twenty  years.  It  does  not  require  that  he  reach 
fifty  either  after  the  act  takes  effect,  or  after  twenty  years  service,  or 
after  applying  for  a  pension.252 

Though  a  pension  is  styled  a  superannuation  allowance,  a  retiring 
officer  is  entitled  to  it  notwithstanding  that  his  age  was  no  part  of  his 
reason  for  retiring.253 

Service  Need  Not  Be  Continuous 

Where  the  right  to  pension  is  conditioned  on  service  for  a  term 
of  years,  it  is  not  necessary,  unless  the  words  manifest  a  contrary 

248.  McAuliffe  v.  Board  (Ky.  1909),  115  S.  W.  808. 

249.  Scott  v:  Mayor  (1903),  68  N.  J.  L.  687,  54  A.  441,  explained  in 
Leffingwell  v.  Kiersted  (1907),  74  N.  J.  L.  407,  65  A.  1029. 

250.  State  v.  Board  (1909),  138  Wis.  133,  119  N.  W.  806,  20  L.  R.  A. 
(N.  S.),  1175. 

251.  See  cases  in  notes  224  and  225. 

252.  People  v.  Abbott  (1916),  274  111.  380. 

253.  Williams  v.  Delohery  (1913),  A.  C.  172. 


ILLINOIS  PENSION  LAWS  COMMISSION.  1918-1919  309 

intent,  that  the  service  be  for  a  single  or  uninterrupted  term.254  Even 
where  a  policeman  who  has  completed  twenty  years  service  is  dis- 
charged without  pension,  he  may,  if  subsequently  appointed  to  the 
force,  retire  on  a  pension  on  the  basis  of  his  previous  service.2"'5 

Whether  the  entire  period  must  be  spent  in  the  service  of  the 
pensioning  municipality  will  depend  on  the  intent  manifested  by  the 
language  of  the  particular  pension  law.  Where  the  law  simply  specifies 
service  for  the  municipality  it  usually  will  be  construed  to  include 
service  within  the  municipal  limits  though  rendered  to  a  different 
municipal  organization  to  whose  duties  the  pensioning  municipality 
has  succeeded.  So  where  a  policeman  had  served  in  territory  most 
but  not  all  of  which  was  afterward,  along  with  other  territory,  incor- 
porated into  a  city,  and  the  policeman  continued  in  service  under  the 
city,  it  was  held  that  all  of  his  service  was  service  on  the  police  force 
of  the  city,  within  the  meaning  of  a  law  for  pensioning  "in  any  munici- 
pality, a  policeman  who  has  served  twenty  years  on  the  police  force 
thereof/'256  So,  too,  employment  for  twenty  years  as  a  teacher  "by 
the  board  of  education  by  whom  he  shall  be  retired"  was  construed 
to  include  employment  by  the  school  authorities  of  any  district  to 
whose  authority  the  board  had  succeeded,  upon  the  ground  that  the 
intent  was  to  secure  service  in  the  territory  to  be  charged  with  the 
cost  of  the  pension.257 

Construction  of  Act  of  1877 

In  O'Connor  v.  Trustees  of  Firemen's  Pension  Fund,258  it  is  inti- 
mated that  a  person  who  served  ten  years  under  the  act  of  1877, 
amended  in  1879,  acquired  a  right  to  a  pension.  The  decision  was 
affirmed  in  the  Supreme  Court  on  a  different  ground. 

What  Constitutes  Service 

A  person  is  in  service  within  the  presumed  meaning  of  a  pension 
law,  if  regularly  performing  service  and  entitled  to  salary  as  an  officer 
or  employe,  though  on  inactive  or  partial  duty  at  a  reduced  salary. 
Thus  a  duly  appointed  policeman  was  held  to  be  in  service  though  he 
was  on  special  duty  as  a  "merchant  policeman"  and  drew  from  the 
city  only  half  the  usual  pay,  another  half  being  paid  him  by  merchants 

254.  People  v.   Armstrong   (1915),   196   111.   App.   199;   State  v.   Love 
(1914),  95  Neb.  573,   145  N.  W.  1010;  Payne  v.  Queen  (Australia,   1881),  7 
Vic.  L.  R.  55;  Simpson  v.  Walker  (1903),  A.  C.  208,  affirming  (1901),  1  So. 
Wales  State  Rep.  359;  and  see  people  v.  French  (N.  Y.  1887),  46  Hun  232. 

255.  Hess  v.   Board  of  Trustees   (1913),   188  111.  App.  8   (retirement 
after  two  years  service  under  last  appointment). 

256.  Van  Dyke  v.  Board  (1916),  88  N.  J.  L.  492,  96  A.  671. 

257.  Pearce  v.  Board  of  Education  (1914),  85  N.  J.  L.  520,  89  A.  1026. 

258.  (1910),  155  111.  App.  460,  affirmed  247  111.  54. 


310  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

and  others  interested  in  his  service.259  But  being  a  de  jure  officer  does 
not  of  itself  constitute  being  in  service.  A  policeman  illegally  dis- 
missed, and  so  prevented  from  performing  duty,  and  afterwards,  by 
mandamus  proceedings,  reinstated,  was  deemed  not  to  have  been 
serving  in  the  police  department  within  the  meaning  of  the  pension 
law  in  the  interim,  although  he  was  entitled  to  salary  for  that  time.260 
Time  spent  in  the  service  of  an  institution  supported  by  state 
funds  has  been  held  not  to  be  time  spent  in  the  service  of  the  state, 
where  the  institution  and  not  the  state  is  the  employer.261  It  is,  how- 
ever, competent  for  the  legislature,  in  fixing  the  conditions  for  pension, 
to  take  into  account  years  of  labor  though  for  private  employers,  and 
an  Ohio  statute  pensioning  teachers  in  public  schools  who  had  taught 
twenty  years,  provided  twelve  years  had  been  spent  in  the  public 
schools  of  the  county,  was  construed  as  embracing  in  the  twenty-year 
period  time  partly  spent  in  teaching  in  private  schools.262  No  decision 
has  been  found  as  to  whether  mere  continued  inability  or  neglect  to 
perform  duty  will  interrupt  a  period  of  service.  But  it  seems  that  an 
exemption  from  all  duty,  such  as  a  year's  absence  without  salary  on 
formal  leave,  will  have  that  effect,  though  the  absentee's  name  is  kept 
on  the  department  rolls.  At  least,  a  teacher  absent  for  a  year  on  leave 
granted  for  ill  health  cannot  count  the  year  to  fill  the  requirements  of 
a  pension  for  teachers  who  have  "taught"  for  twenty  years.263 

Pension  on  Abolition  of  Office 

An  office  is  "abolished"  within  the  meaning  of  an  act  for  pension- 
ing the  office  holder,  when  he  is  removed  in  order  to  reduce  the  force 
and  his  duties  are  assigned  to  others.264 

By  statute  the  holder  of  an  abolished  office  was  to  be  deemed 
suspended  without  pay  and  entitled  to  reinstatement  if  within  a  year 
there  were  need  for  his  services.  It  was  held  that  the  statute  did 
more  than  relieve,  the  officer  from  the  necessity  of  passing  a  civil 
service  examination  if  reinstated,  and  conferred  on  him  the  status  of 

259.  People  v.  Armstrong  (1915),  196  111.  App.  199. 

260.  Carpenter  v.  Chicago  (1916),  199  111.  App.  558  (certiorari  denied, 
making  decision  final). 

261.  Queen  v.  Committee  of  Classifiers   (Australia,   1897),  22  Vic.  L. 
R.  469,  18  Aust.  L.  T.  146. 

262.  Venable  v.  Schafer  (1906),  28  Ohio  Cir.  Ct.  Rep.  202. 

263.  Venable  v.  Schafer  (sup). 

264.  Greville  v.  Williams  (Australia,  1906),  4  Com.  L.  R.  694,  approved 
(1909)  A.  C.  353.     See  also  Justices  of  Middlesex  v.  Queen  (1884),  9  A.  C. 
757  (superannuation  allowance  construed  to  include  allowance  for  retirement 
on  abolition  of  office). 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  311 

an  officer,  so  that  if  he  died  within  a  year,  though  his  services  were 
not  needed,  he  died  in  service  within  the  pension  law.205 

c.     Other  Conditions  Preliminary 

It  is  sometimes  a  condition  of  a  right  to  a  disability  pension  that 
preliminary  proof  of  the  cause  or  extent  of  injury  be  presented,  or  is 
preliminary  determination  of  it  made.  Where  a  statute  required  the 
board  to  pension  a  fireman  partially  disabled,  if  the  chief  upon  a 
medical  examination  ordered  by  the  board  relieved  him  from  active 
service,  it  was  considered  that  the  board  would  be  under  no  obligation 
and  would  have  no  power  to  grant  the  pension,  however  clear  the 
proof  of  disability,  unless  the  examining  officer  had  reported  that 
partial  disability  existed,  or  his  omission  so  to  report  was  in  bad  faith. 
A  determination  by  a  medical  examiner  substantially  in  the  statutory 
manner  was  a  condition  of  the  right.266  So  where  the  law  directed 
the  retiring  on  pension  of  a  policeman  injured  while  on  duty  and 
found  on  medical  examination  to  be  permanently  disabled,  the  court 
refused  to  compel  the  board  to  retire  an  applicant,  and  said  that  the 
board  was  not  entitled  to  retire  him,  where  there  had  been  no  medical 
examination,  though  the  disability  was  obvious  and  conceded,  and  the 
application  was  rejected  only  because  the  board  misinterpreted  the 
meaning  of  the  phrase  "injured  while  on  duty."  267  "A  certificate  of 
so  many  of  the  police  surgeons  as  the  police  commissioner  may  require", 
means  a  certificate  personally  signed  by  all  the  surgeons  requested  to 
make  the  examination.  A  certificate  in  the  name  of  the  board  of 
examiners,  signed  by  its  officers,  will  not  do,  if  objected  to.268  But 
though  it  seems  that  when  the  board  are  to  select  the  medical  exam- 
iner, they  may  also  appoint  a  reasonable  time  and  place  for  the  exam- 
ination, it  is  immaterial,  if  the  examination  is  actually  held,  whether 
it  is  at  the  time  or  place  appointed.  An  examination  at  another  time 
or  place  is  equally  effective.269  But  a  requirement  that  an  applicant 
for  a  disability  pension  must  file  an  examiner's  certificate  of  disability, 
does  not  of  itself  make  the  certificate  conclusive.  The  board,  if  not 

265.  Reidy  v.  N.  Y.   (1906),  185  N.  Y.   141,  77  N.  E.   1011,  reversing 
103  App.  Div.  361,  93  N.  Y.  Supp.  16. 

266.  Karb  v.  State  (1896),  54  Oh.  St.  383,  43  N.  E.  920. 

267.  State   v.   Board    (1903),    119  Wis.  436,  96   N.   W.   825.    See   also 
Gummerson   v.    Toronto    Police    Fund    (1905),    11    Ont.    L.    R.    194,    5    Ont. 
Weekly  Rep.  581    (where  relief  provided  is   to  officers  "in  the  opinion  of 
the    police    commissioner    permanently    incapacitated,"    applicant    has    no 
standing  until  he  has  endeavored  to  obtain  an  expression  of  the  commis- 
sioner's opinion). 

268.  People  v.  McAdoo  (1906),  184  N.  Y.  268,  77  N.  E.  17,  affirming 
109  App.  Div.  892,  96  N.  Y.  Supp.  868,  48  Misc.  Rep.  420,  9$  N.  Y,  Supp.  511 
(compulsory  retirement). 

269.  Queen  Y.  Lord  Leigh  (1897),  1  Q,  B.  132, 

31 


312  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Satisfied,  may  require  further  evidence.  This  is  true  of  the  Illinois 
police  laws  providing  that  the  board  shall,  if  they  deem  it  for  the 
good  of  the  service  retire  a  policeman  disabled  in  service.270  The  word 
"cause"  used  in  a  provision  requiring  an  applicant  to  present  a  sur- 
geon's certificate  setting  forth  the  cause,  nature  and  extent  of  the  dis- 
ability, does  not  refer  to  the  way  in  which  the  injury  came  about,  but 
to  the  way  in  which  it  affects  the  applicant.  A  statement  that  he  is 
disabled  because  of  defective  vision  suffices  as  to  cause.271 

Where  a  right  to  receive  the  annual  installments  of  a  pension  was 
conditioned  on  the  pensioner's  making  affidavit  that  he  did  not  hold 
any  office  of  emolument,  and  the  pensioner,  being  bankrupt,  refused 
to  make  affidavit,  it  was  held  that  strict  compliance  was  riot  essential, 
and  that  the  trustee  in  bankruptcy  was  entitled  to  receive  payment  on 
proof  that  the  pensioner  held  no  office,  and  it  seems  that  if  the  pen- 
sioner died  or  went  insane,  his  administrator  or  conservator  would 
have  a  similar  right.272  Under  section  seven  of  the  Illinois  policemen's 
and  firemen's  act  of  1877,  the  right  to  pension  is  conditioned  on  pay- 
ing assessments  regularly  made,  and  it  seems  tljat  as  to  a  retired 
member  an  assessment  may  be  regularly  made  without  notifying  him 
of  it,  and  that  if  he  does  not  pay  it  he  loses  his  right  to  become  a 
pensioner.273  But  if  no  assessment  is  made  on  the  retired  member, 
failure  to  contribute  as  others  do  will  not  bar  him.274  So  where  officers 
of  certain  classes  were  entitled  on  retirement  to  pensions  increasing 
with  the  length  of  service,  from  a  fund  partly  formed  by  deductions 
from  salaries,  abatement  to  be  made  from  pensions  for  years  of  serv- 
ice before  the  act  passed,  in  respect  to  which  no  deduction  from  salary 
had  been  made,  and  for  some  years  it  was  mistakenly  thought  that 
an  officer  of  a  certain  class  was  not  within  the  act,  and  no  deduction 
from  his  salary  was  made,  it  was  held  that  he  was  entitled  to  pension, 
and  in  computing  its  amount  could  count  the  years  of  service  in  which 
no  deduction  from  his  salary  had  been  made.  Whether  abatement 
should  be  made  for  previous  overpayment  of  salary  was  not  decided.2" 

A  provision  that  no  pension  shall  be  paid  until  the  fund  reaches 
a  given  amount  is  a  condition  upon  the  time,  not  upon  the  right  to 


270.  McGann   v.    Harris    (1904),    114   111.   App.  308;    People  v.   Board 
(1904),  116  111.  App.  252. 

271.  Reynolds  v.  Bingham  (1908),  126  App.  Div.  289,  110  N.  Y.  Supp. 
520,  affirmed  193  N.  Y.  601,  86  N.  E.  1131. 

272.  Spooner  v.  Payne  (Eng.  1852),  1  De  Gex,  M.  &  G.  383,  affirming 
2  De  Gex  &  Smale  (1849),  439. 

273.  Calder  v.  Chicago  (1913),  176  111.  App.  313. 

274.  O'Connor  v.  Trustees   Firemen's   Pension  Fund   (1910),   155   111. 
App.  460,  affirmed  on  another  ground  247  111.  54. 

275.  Mason  v.  Commonwealth  (Australia,  1910),  10  Com.  L.  R.  655. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  313 

receive  the  pension.  When  the  event  which  would  otherwise  entitle 
to  a  pension  occurs  before  the  fund  has  accumulated,  the  right  is  not 
lost,  but  the  time  for  the  award  is  postponed.278 

VII.     CONDITIONS    WHICH    DEFEAT    RIGHT    TO    PEN- 
SION, OR  FORFEIT,  OR  SUBJECT  TO  DISCONTINU- 
ANCE, PENSIONS  GRANTED 
a.     Resignation  and  Dismissal 

Whether  or  not  the  authority  of  a  board  to  grant  or  the  right  of 
an  applicant  to  receive  a  pension  is  conditional  upon  his  remaining  in 
service  until  he  applies  for  or  receives  it,  depends  on  the  provisions 
of  the  particular  law,  and  is  a  question  of  construction.  Under  Section 
three  of  the  Park  Police  act  of  1913,  the  right  was  not  so  conditioned. 
That  section  provided  that  when  any  person  shall  have  served  twenty 
years  on  the  police  force,  the  police  board  "shall  order  and  direct  that 
such  person,  after  his  service  on  such  police  force  shall  have  ceased, 
shall  be  paid  a  yearly  pension."  This  made  it  the  board's  duty  to 
award  a  pension  on  application,  although  the  applicant  before  he 
applied,  had  been  discharged  for  misconduct.277 

Where  the  law  confers  a  right  to  "retire  upon"  a  pension,  an 
officer  is  entitled  to  the  pension  although  he  resigns  without  having 
applied  for  it,  and  without  having  been  placed  upon  a  retired  roll,278 
and  without  expectation  of  claiming  it.279  He  "retires"  though  he 
resigns  to  accept  another  office  at  a  higher  salary.279'1  But  an  officer 
dismissed  for  misconduct  does  not  "retire,"  and  is  not  entitled  to  a 
pension,  at  least  where  it  is  provided  that  retired  officers  may  be  called 
on  for  duty,  if  able.280  Application  to  a  board  for  retirement  on  p$n- 
sion  does  not  itself  effect  retirement.  The  applicant  is  still  in  service, 
subject  in  general  to  discipline,  bound  to  perform  duty,  and  entitled 
to  salary.281  If  the  authority  to  place  or  the  right  to  be  placed. on  the 

276.  Miller  v.   Hamilton   (1898),  28  Canada  Sup.  Ct.  Rep.  475;  State 
v.  Board  (1906)   117  La.  1071,  42  So.  506. 

277.  Stiles  v.   Trustees    (1917),   281    111.   636,   reversing  205   111.   App. 
338. 

Craig,  J.,  said:  "Ordinarily  twenty  long  years  of  faithful  service  ought 
in  itself  to  count  for  something,  and  the  legislature  evidently  thought  so; 
but  whether  it  did  or  not  is  not  a  proper  subject  of  inquiry  here,  as  long 
as  it  has  seen  fit  in  plain  and  unmistakable  terms,  to  fix  as  the  only  condi- 
tion and  prerequisite  for  a  pension  twenty  years  of  service  and  ceasing 
from  such  service."  The  language  of  the  act  was  somewhat  changed  in 
1917;  but  the  words  of  the  corresponding  section  of  the  police  act  for  cities 
of  5000  to  100,000  in  habitants  are  like  those  here  construed. 

278.  State  v.  Love  (1914),  95  Neb.  573,  145  N.  W.   1010;  Williams  v. 
Delohery  (1913),  A.  C.  172. 

279.  Williams  v.  Delohery,  sup. 

280.  Collier  v.  The  King  (Australia,  1901),  27  Vic.  L.  R.  25,  234. 

281.  People  v.  French  (1888),  108  N.  Y.  105,  15  N.  E.  188. 


314  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

pension  roll  is  expressed  as  being  a  right  or  authority  for  retirement 
by  the  board  on  pension,  it  is  construed,  if  nothing  indicates  a  differ- 
ent intent,  as  conditioned  on  the  applicant's  remaining  in  service  until 
the  board  acts,  or  at  least  on  his  not  being  dismissed ;  for  after  he  has 
been  removed  from  his  position  he  cannot  be  retired  by  the  board.282 
But  there  is  in  some  cases  a  question  whether  a  law  which  confers  a 
right  to  be  retired  on  pension  does  not  impliedly  take  away  authority 
to  dismiss  after  pension  has  been  applied  for,  or  to  dismiss  for  the 
sole  purpose  of  forestalling  an  application,  so  that  an  attempted  dis- 
charge is  inoperative,  and  the  right  to  retirement  remains.283  More- 
over, it  has t  been  held  that  where  by  statute  only  active  members  of 
the  fire  department  are  entitled  to  the  benefits  of  a  relief  association, 
a  fireman  adjudged  insane,  although  his  office  thereupon  becomes 
vacant,  is  nevertheless  entitled  to  pension  so  long  as  his  name  is  still 
on  the  association's  rolls,  and  that  consequently  if  he  dies  before  his 
name  is  stricken  from  the  rolls  his  widow  is  entitled  to  a  pension.284 

If  the  removal  takes  effect  so  that  the  person  is  no  longer  in 
service,  he  cannot  have  a  pension  unless  he  first  gets  reinstated  so  that 
he  may  then  be  retired.285  But  where,  as  in  case  of  a  service  pension 
under  the  Park  Police  act  of  1913,  the  right  to  pension  is  not  lost  by 
removal,  an  applicant  whose  service  has  ceased  by  removal,  though 
the  removal  was  wrongful,  is  entitled  to  receive  a  pension  without 
seeking  reinstatement.  And  being  entitled  to  it,  he  may  maintain  man- 
damus proceedings  to  obtain  it  against  the  pension  board,  though  he  is 

282.  No  right  to  pension  if  discharged  before  application;   McGann 
v.  Harris   (1904),   114  111.  App.  308;   People  v.  Board   (1904),   116  111.  App. 
252;  Larson  v.  Chicago  (1916),  199  111.  App.  321;  nor  authority  to  grant  it: 
Karb  v.  State  (1896),  54  Oh.  St.  383,  43  N.   E.  920   (semble).    No  right  to 
pension   if  discharged  after  application:    People  v.   French    (1888),   108   N. 
Y.    105,    15   N.   E.   188,   affirming  44  Hun  24;    People  v.   Brady    (1895),   145 
N.  Y.  253,  39  N.  E.  960;  nor  authority  to  grant  it;  People  v.  French,  sup. 
(semble);  State  v.  Board  (1904),  123  Wis.  245,  101  N.  W.  373.    In  Rudolph 
v.  Moshenvel   (1911),  37  App.   Dist.  of  Col.  76,  a  provision  that  the  fund 
"shall  be  used"  to  pension  any  fireman  so  disabled  without  fault  as  to^be 
discharged  from  service  therefor  was  construed  to  fix  the  right  to  pension 
at  the  time  the  disabling  injury  occurred,  so  that  if  in  fact  free  from  fault 
he  was  entitled  to  a  pension,  though  before  applying  for  it  he  was  removed 
for  alleged  intoxication  causing  his  injury. 

283.  People  v.  Greene  (1905).  181  N.  Y.  308,  73  N.  E.  1111,  reversing 
97  App.  Div.  502,  90  N.  Y.  Supp.  162;  State  v.  Board  (1904),  123  Wis.  245, 
101  N.  W.  373  (semble). 

284.  Anderson   v.    Firemen's    Relief   Ass.    (1914),    157   Wis.    199,    147 
N.  W.  1. 

285.  Larson  v.  Chicago  (1916),  199  111.  App.  321;  Karb  v.  State  (1896), 
54  Oh.  St.  383,  43  N.  E.  920.    As  to  the  remedies  of  an  officer  or  employe 
wrongfully  removed  or  discharged,  see   Chicago  v.   People   (1904),  210  111. 
84;   Bullis  v.  Chicago   (1908),  235   111.  472;   Preston  v.  Chicago   (1910),  246 
111.  26;  Gersch  v.  Chicago  (1911),  250  111.  551;   Gersch  v.  Chicago   (1915), 
192  111.  App.  190. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  315 

at  the  same  time  prosecuting  mandamus  proceedings  to  procure  rein- 
statement and  back  salary,  on  the  ground  that  his  removal  was  wrong- 
ful, and  that  he  is  still  an  officer  de  jure.280  But  it  seems  that  if  rein- 
stated he  cannot  have  pension  money  for  the  time  he  is  in  active 
service,286  nor  could  he  have  pension  money  and  back  salary  for  the 
same  period. 

b.  Pending  Charges 

Where  a  right  is  given  to  retire  on  pension  if  at  the  time  of  appli- 
cation no  charges  are  pending,  the  effect  may  be  to  prevent  retirement 
for  the  purpose  of  avoiding  trial  or  removal  for  misconduct,  and  also 
to  prevent  the  bringing  of  charges  after  application  for  the  purpose 
of  avoiding  the  necessity  of  paying  a  pension.  The  condition  is  to  be 
construed  in  the  light  of  its  purpose.  There  are  pending  charges,  if 
a  written  statement  that  the  officer  has  neglected  his  duty,  and  of 
facts  which  constitute  neglect,  has  been  so  presented  to  the  body  before 
which  charges  should  be  made  that  it  is  their  duty  to  act  upon  it, 
although  the  statement  is  informal,  the  officer  has  not  been  cited  to 
answer  it,  and  its  apparent  purpose  was  to  spur  him  to  action  or  to 
lay  a  foundation  for -future  charges.287  But  an  anonymous  letter  to 
the  chief  containing  a  list  of  disorderly  houses  in  a  precinct,  does  not 
constitute  a  charge ;  and  it  seems  a  charge  must  be  an  accusation  stat- 
ing facts  as  to  conduct  which  constitute  a  breach  of  duty.288 

c.  Delay 

If  after  retirement  a  right  to  a  pension  arises,  mere  delay  in 
applying  will  not  forfeit  the  right,  though  there  is  delay  of  twenty 
years.  And  even  where  there  has  been  an  omission  for  twenty  years  to 
pay  assessments,  but  the  omission  is  excusable  so  that  it  is  not  a  ground 
of  forfeiture  in  itself,  it  will  not,  so  far  as  concerns  future  install- 
ments of  the  pension,  give  the  character  of  laches  to  the  delay,  where 
the  fund  has  gained  more  by  the  pension's  not  having  been  paid  out 
in  the  past,  than  it  has  lost  by  the  assessments  not  having  been  paid 
in.289  Though  a  widow  first  applies  for  a  pension  two  years  after  her 
husband's  death,  she  is  entitled  to  back  pension  beginning  at  least  with 
the  month  after  he  died.200  Where  a  claim  for  police  pension  was  made 
and  disallowed,  and  four  years  later  was  allowed  and  certiorari  brought 

286.  Stiles  v.  Trustees  (1917),  281  111.  636. 

287.  People  v.  Roosevelt   (1895),  35  N.  Y.  Supp.  1085,  14  Misc.  Rep. 
531,  affirming  34  N.  Y.  Supp.  228,  12  Misc.  Rep.  622. 

288.  People  v.  Greene  (1905),  181  N.  Y.  308,  73  N.  E.  1111,  reversing 
90  N.  Y.  Supp.  162,  97  App.  Div.  502. 

289.  O'Connor  v.  Trustees   Firemen's  Pension   Fund   (1910),   155   111. 
App.  460,  affirmed  247  N.  Y.  54. 

290.  People  v.  Armstrong  (1915),   196  111.  App.  199. 


316  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

to  set  aside  the  disallowance  as  constituting  a  bar  to  the  allowance, 
there  being  excuse  for  the  delay,  neither  the  lapse  of  time,  nor  the  fact 
that  one  hundred  and  forty-eight  members  had  in  the  interim,  by  join- 
ing the  force  acquired  expectations  in  some  degree  impaired  by  the 
allowance,  barred  the  relief.291 

d.     Accepting  Other  Relief 

A  pension  for  life  granted  unconditionally  on  retirement,  whether 
by  reason  of  length  of  service292  or  by  reason  of  permanent  disability, 
is  not  forfeited  by  entering  upon  other  employment.  This  is  true  even 
though  the  employment  is  by  the  same  city,  and  it  may  under  certain  cir- 
cumstances be  true  though  the  employment  is  in  the  same  capacity. 
At  any  rate,  where  a  New  York  City  policeman,  retired  on  a  pension 
after  twenty  years  service,  joined  the  Brooklyn  force,  and  afterwards 
the  cities  were  consolidated,  it  was  held  he  had  a  right  to  both  pension 
and  salary  from  the  consolidated  city.293  But  pension  laws  do  not  con- 
template the  holding  of  more  than  one  pension  under  the  same  board 
by  the  same  person  at  the  same  time,  for  a  pension  is  granted  as  an 
allowance  suitable  for  the  pensioner's  needs.  This  is '  shown  to  be  so, 
where  the  statutory  right  is  to  receive  "an"  annual  -pension.  For  this 
reason  when  the  policeman  above  mentioned,  having  completed  a  sec- 
ond term  of  twenty  years,  applied  to  be  retired  upon  a  second  and 
larger  pension,  it  was  held  that  he  was  not  entitled  to  a  second  pension, 
but  he  was,  it  was  said,  entitled  to  have  the  pension  he  already  held 
increased  to  make  it  equal  to  what  the  larger  pension  would  have 
been.294  A  person,  however,  entitled  to  a  pension  which  is  denied  him, 
but  awarded  a  smaller  pension,  -does  not  merely  by  receiving  money 
under  the  pension  awarded,  lose  his  right  to  the  larger  pension.  "A 
statutory  claim  cannot  be  defeated  in  that  way  unless  there  is  some- 
thing in  the  nature  of  accord  and  satisfaction  or  estoppel."2  In  a 
California  case,  where  the  law  provided  a  pension  for  the  widow  of 
an  officer  killed  on  duty,  and  a  pension  for  disability  to  cease  at  death, 
and  an  officer  disabled  on  duty  accepted  a  disability  pension,  but  died 
of  the  injury,  the  court  thought  the  pensions  were  exclusive  of  each 
other,  and  that  by  the  officer's  acceptance  of  a  pension  to  cease  at 


291.  McGurty  v.  Mayor  of  Newark  (1917),  90  N.  J.  L.  103,  100  A.  849. 

292.  Williams  v.  Delohery  (1913),  A.  C.  172. 

293.  People  v.  York  (1899),  41  App.  Div.  419,  59  N.  Y.  Supp.  735. 

294.  Mulvey  v.  Waldo  (1912),  80  Misc.  Rep.  317,  140  N.  Y.  Supp.  988. 

295.  Grenville    v.     Williams     (Australia,     1906),    4   Com.    L.    R.    694, 
reversed    on    another    ground    in    Williams    v.    Curator    (1909),    A.    C.    353; 
Moore  v.  Board   (1907),   121  App.  Div.  862,   106  N.  Y.   Supp.  983,  affirmed 
195  N.  Y.  614,  89  N.  E.  1105. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  317 

death,  the  widow  was  barred,296  The  court's  reasoning  is  unconvinc- 
ing; its  result  leaves  unprovided  for  a  widow  whom  the  legislature 
plainly  desired  to  protect,  and  the  decision  was  distinguished  in  a  later 
case  in  which  it  was  held  that  a  widow  was  not  barred  by  her  hus- 
band's accepting  on  retirement  after  long  service  a  pension  to  cease  at 
death.297 

A  right  to  a  pension  is  not  impaired  by  the  fact  that  other  relief 
happens  to  be  open  to  the  applicant,  as,  for  instance,  in  the  case  of  an 
injured  policeman,  a  right  of  action  for  damages  against  a  person  whose 
fault  caused  the  injury.;08  Nor  is  it  material  that  the  person  at  fault 
is  the  city.  Or  that  the  city's  liability,  like  the  right  to  a  pension,  is 
created  by  special  statute,  such  as  a  Workmen's  Compensation  act.-09 
And  conversely  the  fact  that  one  is  entitled  to  a  pension  does  not  bar 
him  from  suing  the  city  for  damages  instead.  Acceptance  of  city 
employment  under  a  law  by  which  one  may  have  a  pension  if  injured 
does  not  evidence  a  contract  not  to  sue  the  city  if  injured  by  it,  nor 
does  the  pension  law  intend  by  its  own  force  to  abolish  the  right  of 
action  against  the  city  of  those  who  are  eligible  to  its  benefits.300  So 
the  dependents  of  a  fireman  killed  on  duty  may  sue  the  city  under  a 
statute  giving  dependents  a  right  of  action  against  one  who  causes 
death  by  wrongful  act.301  And  a  city  employe  eligible  to  pension  may 
recover  under  the  Workmen's  Compensation  act.302 

It  is  a  different  question  whether  the  acceptance  of  relief  in  one 
form  prevents  or  diminishes  recovery  in  the  other.  This  question  was 
presented  in  a  series  of  cases  in  the  state  of  Washington.  It  was  held 
that  the  damages  a  policeman  may  recover  against  a  wrongdoer  who 
has  disabled  him  are  not  diminished  by  his  having  received  a  disability 
pension  from  the  city,  or  by  his  having  received  pension  money  under 
it.80'  It  was  said  this  would  be  so  though  the  policeman  had  contrib- 
uted nothing  to  the  pension  fund.304  It  was  also  decided  that  a  city 
employe  does  not  by  recovering  full  damages  from  a  person  who  has 
injured  him  impair  his  right  to  recover  from  the  city  his  full  claim 
under  a  charter  provision  that  an  employe  disabled  in  the  discharge 

296.  Edwards  v.  Swigert  (1911),  15  Cal.  App.  503,  115  P.  256. 

297.  Mackey  v.  Mott  (1914),  25  Cal.  App.  110,  142  P.  1082. 

298.  Engstrom  v.  Seattle  (1916),  92  Wash.  568,  159  P.  816. 

299.  Dickey  v.  Jackson  (1917)  —  Iowa  — ,  165  N.  W.  387. 

300.  .  Coots  v.  Detroit  (1889),  75  Mich.  628,  43  N.  W.  17,  5  L.  R.  A.  315 
(especially  where  pension  is  not  granted  as  of  right  nor  unless  disability  is 
incurred  on  duty). 

301.  Longfellow  v.  Seattle  (1913),  76  Wash.  509,  136  P.  855. 

302.  Dickey  v.  Jackson  (1917),  —  Iowa  — ,  165  N.  W.  387. 

303.  Heath  v.  Seattle  Taxicab  Co.  (1913,  73  Wash.  177,  131  P.  843. 

304.  Engtrom  v.  Seattle   (1916),  92  Wash.  568,   159  P.  816. 


318  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

of  his  duties  may  receive  half  pay  during  disability  for  six  months.305 
Mount,  J.,  said :  "It  was  in  the  nature  of  a  pension  for  the  services 
which  had  theretofore  been  rendered  by  the  employe."  But  in  an 
earlier  Washington  case,308  it  was  held  that  as  a  pension  for  death  or 
disability  is  intended  as  compensation,  the  receipt  of  city  pension  money 
will  bar  an  action  against  the  city  itself  for  damages  caused  by  its 
negligence,  at  least  where  the  pension  is  large  enough  fairly  to  be 
regarded  as  adequate  compensation.  It  was  ruled  that  a  pensioned 
widow  could  not  have  damages  from  the  city  for  causing  her  hus- 
band's death.  The  court  relied  on  the  Illinois  case  of  Eckman  v.  C. 
B.  &  Q.  R.  Co.307  and  similar  cases.  But  those  cases  only  hold  that  an 
employe  accepting  benefits  from  a  private  employer's  benefit  fund 
impliedly  agrees  to  release  the  employer.  They  do  not  directly  apply 
to  a  case  where  an  employe  has  a  right  by  law  to  the  benefit.  A  pension 
to  a  child  until  sixteen  might  plainly  be  inadequate  compensation  for 
the  loss  of  its  father's  support.  The  question,  it  will  be  noticed,  is 
not  whether  the  value  of  the  pension  should  be  deducted  from  the 
damages.  The  decision  may  be  compared  with  a  recent  Iowa  ease 
where  a  disabled  employe  received  an  award  against  the  city  under 
a  Workmen's  Compensation  act,  and  then  applied  for  a  pension.  He 
was  held  to  be  entitled  to  the  pension.308  Weaver,  J.,  said:  'The  words 
'pension'  and  'compensation'  are  not  synonymous,  nor  is  the  plan  and 
purpose  which  underlie  the  Workmen's  Compensation  act  necessarily 
identical  with  those  which  induce  the  establishment  of  a  pension  fund. 
The  latter  is  ordinarily  a  gratuity  from  the  government  or  some  of 
its  subordinate  agencies,  in  recognition,  but. not  in  payment,  for  past 
services,  though  when  provided  as  part  of  a  scheme  of  employment  it* 
would  seem  to  include  some  elements  of  a  contractual  character,  and 
is  doubtless  intended  to  encourage  faithfulness  of  service.  On  the 
other  hand,  Workmen's  Compensation  acts  are  intended  to  secure  to 
the  injured  employes  a  money  allowance,  which  shall  to  some  degree 
pay  to  employes  a  compensation  for  the  loss  or  damages  to  which  their 
injuries  in  the  master's  service  has  subjected  them.  The  purposes  of 
the  case  before  us  do  not  require  us  to  attempt  solution  of  the  difficult 
question  how  far  statutes  dealing  with  these  subjects  may  both  stand 
and  the  benefits  of  both  be  enjoyed  by  the  same  individual.  It  would 
seem,  however,  under  familiar  principles,  that  if  there  be  no  express 
repeal  of  the  earlier  statute,  and  no  demonstrable  inconsistency  between 

305.  Engstrom  v.  Seattle,  sup. 

306.  Longfellow  v.  Seattle  (1913),  76  Wash.  509,  136  P.  855.     Farley 
v,  Mayor  (1895),  36  N.  Y.  Supp.  1115,  15  Misc  Rep.  33  (semble)  ace. 

307.  (1897),  169  111.  312,  48  N.  E.  496,  38  L.  R.  A.  750. 

308.  Dickey  v.  Jackson  (1917),  —  Iowa  — ,  165  N,  W.  387, 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  319 

such  statute  and  one  of  a  later  enactment,  both  must  be  given  effect 
according  to  their  terms."  It  was  held  that  as  the  pension  law  was 
still  in  force  the  employe  was  entitled  to  a  pension,  that  if  he  was 
also  within  the  Workmen's  Compensation  law,  receipt  of  compensation 
did  not  bar  his  pension,  and  that  if  not  within  it,  the  fact  he  had 
received  money  to  which  he  was  not  entitled  did  not  affect  his  right 
to  pension. 

e.     Waiver  and  Misconduct 

A  right  may  be  given  up  by  agreement  based  on  consideration. 
Where  only  persons  who  pass  a  medical  examination  are  eligible  to 
membership  in  a  police  relief  association,  a  policeman  admitted  on  an 
agreement  not  to  claim  benefits  until  he  has  passed  the  examination, 
is  not  entitled  to  benefits  if  he  has  not  taken  the  examination.309 

Misconduct  does  not,  except  as  provided  by  statute,  affect  the 
right  to  a  pension  unless  it  consists  in  fraud  in  relation  to  the  pension 
itself.  A  fireman's  widow  is  entitled  to  pension  though  she  has 
deserted  her  husband  and  keeps  a  house  of  ill  fame.310  Good  standing 
is  not  an  implied  condition  of  retirement  on  a  police  service  pension.311 
Nor  may  a  pension  be  stopped  because  of  a  retroactive  order  discharg- 
ing the  pensioner  for  misconduct.312  A  policeman  retired  for  disability 
is  entitled  to  retain  his  pension  though  he  is  bankrupt,  has  left  the 
country  to  evade  creditors,  and  a  warrant  is  out  for  his  arrest.  And 
a  provision  that  where  incapacity  ceases  the  board  may  "cancel  the 
pension  and  require  him  to  serve  again  in  the  police  force"  does  not 
permit  a  discontinuance  without  offering  him  a  position  on  the  force 
though  he  is  disqualified  for  holding  it.313 

Refusal  to  undergo  a  medical  examination  provided  for  by  stat- 
ute does  not  of  itself  take  away  the  right  to  the  continuance  of  a  dis- 
ability pension,  although  the  pension  board  may  for  that  reason  suspend 
or  discontinue  the  pension,  if  the  statute  expressly  or  impliedly  author- 
izes them  to  do  so.314  It  is  not,  unless  the  statute  makes  it  so,  a  condi- 
tion to  the  right  to  retain  a  pension  that  the  pensioner  reside  in  the 
state  or  keep  the  board  notified  of  his  whereabouts.  A  provision  that 


309.  Lydon  v.  Police  Pension  Fund  Ass.  (1898),  8  Pa.  Superior  Ct.  251. 

310.  Gibbs  v.  Minneapolis  Fire  Relief  Ass.  (1914),  125  Minn.  174,  145 
N.  W.  1075,  Ann.  Cas.  1915C  749. 

311.  People  v.  Greene  (1905),  181  N.  Y.  308,  73  N.  E.  1111,  reversing 
97  App.   Div.   502,  90  N.  Y.   Supp.    162,   and  virtually  overruling  People  v. 
Greene  (1903),  87  App.  Div.  589,  84  N.  Y.  Supp.  673. 

312.  State  v.  Board  (1912),  20  Ohio  Cir.  Ct.  Rep.  (N.  S.),  13. 

313.  Queen  v.  Lord  Leigh  (1897),  1  Q.  B.  132. 

314.  State  v.  Holmes  (1915),  23  Ohio  Cir.  Ct.  Rep.  (N.  S.),  133. 


320  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

an  officer  retired  on  service  pension  may  be  called  on  for  service  in 
emergency  does  not  impose  such  a  condition,  since  in  substance  the 
pension  is  for  past,  not  future,  service.315 

The  fact  that  an  officer's  appointment  was  irregular  and  might, 
because  he  was  ineligible,  have  been  set  aside,  does  not  affect  the 
validity  of  his  pension.  Service  as  an  officer  or  employe  brings  him 
within  the  pension  law.316 

£.     Fraud,  Mistake  and  Change  of  Circumstances 

A  person  who  has  been  induced  by  another's  fraud  to  grant  the 
other  a  right  may,  if  he  wishes,  permit  the  transaction  to  stand ;  or,  if 
no  interests  of  innocent  parties  are  involved,  he  may  choose  to  treat 
his  fraudulently  obtained  consent  as  if  it  had  not  been  given,  and  regard 
the  transaction  as  a  nullity;  or,  if  he  prefers  to  regard  the  transac- 
tion as  operative,  he  may  rescind  it  on  the  ground  that  because  of  the 
fraud,  it  does  not  bind  him.  Thus  if  a  pension  is  obtained  by  fraud, 
the  board  which  has  granted  it  may  overlook  the  fraud  and  continue 
to  pay  the  pension,  or  discontinue  it  without  formality,  or  revoke  it 
for  fraud.317  And  where  a  federal  pension  has  been  obtained  by  the 
pensioner's  fraud,  the  United  States  may  at  once  sue  him  and  recover 
the  money  paid  on  it.318 

If  a  pension  is  awarded  in  a  case  not  within  the  pension  law, 
whether  by  fraud,  mistake  of  law  or  of  fact  or  for  any  other  reason, 
the  grant,  being  unauthorized,  is  void,  and  there  is  no  authority  to 
continue  paying  it.319  But  if  a  pension  is  awarded  in  a  case  within  the 
statute,  that  is  to  say  in  a  case  where  the  board  is  authorized  to  grant 
the  pension,  if  it  believes  the  statutory  conditions  to  be  fulfilled,  the 

315.  Moffatt  v.  Lowell  (1913),  215  Mass.  92,  102  N.  E.  344. 

316.  See  In  re  Hickey  (1907),  56  Misc.  Rep.  118,  106  N.  Y.  Supp.  148 
(policeman  naturalized  by  fraud  of  others  retired  after  sixteen  years  service 
on  disability  pension). 

317.  See  Eddy  v.  People  (1905),  218  111.  611;  Tyson  v.  Board  (1910), 
139  Ky.  256,  129  S.  W.  820. 

318.  U.  S.  v.  Lalone   (1890),  44  Fed.  475 -(reversed  164  U.  S.  255  on 
ground  fraud  not  proved);  Pooler  v.  U.  S.   (1904),   127  Fed.  519. 

319.  Eddy  v.   Morgan   (1905),  216  111.  437;   People  v.  Waddy   (1902), 
172  N.  Y.  305,  65  N.  E.  164;  The  King  v.  Local  Pension  Committee  (1910), 
2    Irish    Rep.   403.     A    statute    authorized   pensions    to    indigent    persons   of 
seventy,  the  decision  of  the  committee  making  the  award  to  be  conclusive, 
except  that  it  might   discontinue  a  pension  if  the  conditions   did  not  con- 
tinue to  be  fulfilled.    An  unqualified  pensioner  might  be  compelled  to  repay 
the  money  he  had  received.    It  was  held  proper  to   discontinue  a  pension 
awarded    by    mistake    to    a    person    under    seventy,    not    only    because    the 
attainment  of  seventy  was  a  condition  which  did  not  "continue"  to  be  ful- 
filled, but  also  because,   as  it  was  the   basis   of  the   right  to  a   pension,  it 
was  an  implied  condition  of  the  right  to  receive  it,  and  the  clause  making 
the  committee's  'decision  conclusive  was  inapplicable.    Murphy  v.  The  King 
(1911),  A.  C.  401,  affirming  (1911),  2  Ir.  R.  88. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  321 

pension  is  valid  though  based  on  mistake,  and  does  not  cease  to  be 
payable  merely  because  it  afterwards  appears  that  the  applicant  had 
not  fulfilled  the  requirements  and  that  the  pension  should  not  have 
been  granted.320  But  a  question  may  arise  in  such  a  case  whether  the 
board's  authority  extends  to  discontinuing  it.  As  has  been  seen,  the 
right  which  a  pension  confers  is  revocable  by  the  authority  that  author- 
ized its  grant.  Whether  it  is  revocable  by  the  board  depends  simply 
upon  whether  the  board  has  expressly  or  impliedly  been  vested  with 
authority  to  revoke  the  pension  under  the  circumstances,  as  well  as 
to  grant  it.  The  delegation  to  a  board  of  power  to  award  and  pay 
pensions  does  not  of  itself  imply  intent  to  delegate  a  power  of  revoca- 
tion. This  is  especially  so  where  the  statute  provides  that  the  board's 
decisions  on  applications  shall  be  final  and  conclusive.  An  added  pro- 
viso that  the  decision  shall  not  be  subject  to  review  or  reversal  except 
by  the  board  itself,  is  perhaps  intended  to  make  plain  that  a  rejected 
application  may  afterwards  be  allowed,  but  it  does  not  indicate  intent 
affirmatively  to  vest  the  board  with  the  separate  power  of  taking  away 
a  right  definitely  granted.321 

It  follows  a  fortiori  that  a  pension  board  has  no  authority  to 
revoke  or  reduce  an  award  merely  because  by  mistake  of  fact  the 
grant  as  made  was  inexpedient.  Police  authorities  empowered  to 
award  gratuities  to  the  children  of  deceased  policemen  if  they  see  fit, 
have  no  authority  to  revoke  an  award  on  learning  that  the  children 
were  of  full  age  and  earning  their  own  living.322  A  board  authorized 
to  award  to  disabled  policemen  relief  not  to  exceed  $50  a  month  is  not 
thereby  authorized  to  reduce  an  award  once  made  because  they  dis- 
cover that  the  policeman  is  not  dependent  on  his  pension.323  Nor  can 
a  board  stop  a  pension  because  by  change  of  circumstances  it  has 
become  desirable  to  do  so,  as  where  a  fireman  retired  on  pension  but 
still  treated  as  a  member  of  the  department  is  discharged  for  miscon- 
duct.324 Nor,  it  seems,  can  a  pension  for  permanent  disability  be  dis- 

320.  See  cases  in  note  321. 

321.  Eddy  v.  People   (1905),  218  111.  611,  affirming  120  111.  App.  626 
(board  has  no  authority  to  drop  policeman's  widow  from  rolls  on  ground 
his  death  did  not  result  from  injury  in  discharge  of  duty) ;  Tyson  v.  Board 
(1910),  139  Ky.  256,   129  S.  W.  820  (board  has  no  authority  to  drop  from 
rolls  on  erroneously  deciding  that  it  had  no  jurisdiction  to  grant  the  pen-, 
sion.    A  provision  that  its  determination  shall  be  conclusive  and  not  subject 
to  review  refers  only  to  its  determination  in  granting  pensions) ;  Board  of 
Police    Comrs.    v.    McClenehan    (1917),    Md.,    107    A.    786    (board    has    no 
jurisdiction  to  discontinue  pension  on  mistaken  belief  that  it  had  no  juris- 
diction to  grant  it).    See  also  cases  in  following  notes. 

322.  Campbell    v.    Glasgow    Police    Comrs.    (1895),    32    Scottish    Law 
Reporter  497. 

323.  Rudolph  v.  U.  S.  (1913),  41  App.  Dist.  of  Col.  29. 

324.  State  v.  Board  (1912),  20  Ohio  Cir.  Ct.  Rep  (N.  S.)   13. 


322  ILLINOIS  PENSION  JLAWS  COMMISSION,  1918-1919 

continued  because  the  disability  has  ceased,325  or  a  pensioner  dropped 
from  the  rolls  because  he  has  received  compensation  under  the  Work- 
men's Compensation  act.326 

Since,  however,  a  pension  is  revocable  by  the  state,  it  is  revocable 
by  the  pension  board,  if  the  board  is  duly  authorized.  The  authority 
may  be  implied  as  well  as  express  and  may  result  from  the  general 
tenor  of  the  pension  act. 

The  control  over  federal  pensions  which  the  act  of  Congress  vests 
in  the  Commissioner  of  Pensions  extends  to  the  reconsideration  of 
ratings,  at  least  so  far  as  to  revoke  an  increase,  previously  granted, 
on  the  ground  that  it  is  unwarranted  by  the  proofs.327  A  provision 
that  persons  pensioned  for  disability  shall  undergo  a  medical  ex- 
amination and  that  according  to  the  result  of  the  examination  the 
commissioners  may  determine  whether  the  pension  shall  con- 
tinue, impliedly  authorizes  the  commissioners  to  discontinue  the 
pension  without  examination,  if  the  pensioner  refuses  to  attend.325  But 
refusal  to  be  examined  will  not  justify  discontinuing  the  pension,  unless 
the  examination  is  to  be  of  the  character  contemplated  by  the  statute, 
that  is  to  say,  for  the  purposes  of  ascertaining  the  pensioner's  capacity 
for  service.  Where  the  police  authorities  ordered  a  pensioner  to  appear 
for  examination  for  the  mere  purpose  of  affording  an  opportunity  of 
arresting  him  when  he  appeared,  it  was  held  that  the  order  and  a 
subsequent  discontinuance  of  his  pension  on  his  refusal  to  appear 
were  unauthorized,  although  the  statute  required  them  yearly  to  satisfy 


325."    Board  of  Police  Comrs.  v.  McClenelian   (1917),  Md.  101  A.  786. 

326.  Dickey  v.   Jackson   (1917),  —  Iowa  — ,    165   N.   W.   387   (order 
without  notice). 

327.  Lochren  v.  Long  (1895),  6  App.  Dist.  of  Col.  486.    An  English 
statute  which  established  a  pension  fund  for  constables  liable  to  dismissal 
without  cause,   empowered   the   secretary   of  state   to   order   that   any  con- 
stable who  had  served  fifteen  years  and  was  sixty  years  old  or  infirm  "may 
be   superannuated  and   receive     *     *     *     a   yearly  allowance  but 
nothing  herein  contained  shall  be  construed  to  entitle  any  constable  abso- 
lutely   to    any    superannuation    allowance,    or    to    prevent    him    from    being 
dismissed  without  superannuation  allowance."    Mr.  Justice  Blackburn  con- 
strued the  statute  as  empowering  the  secretary  of  state  to  revoke  an  allow- 
ance granted,  making  the  allowance  as  precarious  as  the  tenure  of  office 
had  been;  but  he  said  that  under  another  statute  (11  and  12  Vic.  c.  14,  see 
Hobson  v.   Mayor  of  Hull,  4  E.  &  B.  986)   which  entitled  a  constable  of 
fifty  to  retire  on  a  yearly  allowance  after  fifteen  years  service,  the  pension 
was  irrevocable.    Queen  v.  Metropolitan  Receiver  (1863),  4  B.  &  S.  593. 

328.  MacFarland  v.    Bieber    (1909),   32   App.    Dist.   of   Col.    513.     But 
where  the  police  commissioner  had  power  to  recall  to  duty  a  poHceman 
whose  disability  had  ceased,  it  was  held  that  a  pension  board  had  no  implied 
authority  to  suspend  the  pension  for  refusal  to  appear  for  physical  exam- 
ination.  State  v.  Holmes  (1915),  23  Ohio  Cir.  Rep.  (N.  S.),  133. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  323 

themselves  that  the  incapacity  continued,  and,  unless  they  resolved 
that  examination  was  unnecessary,  to  do  so  by  medical  examination, 
and  provided  that  they  might  treat  refusal  to  submit  to  examination 
as  capacity.329  And  authority  to  determine  by  medical  examination 
whether  a  disability  pension  shall  be  reduced  is  not  authority  to  reduce 
it  because  it  incidentally  appears  on  a  medical  examination  that  pen- 
sioner is  a  man  of  means.330 

VIII.     AMOUNT  OF  PENSION 

Cases  involving  questions  as  to  the  amount  for  which  pensions 
should  be  awarded  are  few. 

A  New  York  statute  gave  disabled  policemen  a  right  to  retire 
voluntarily  on  half  salary,  and  empowered  the  police  commissioner  to 
retire  them  compulsorily  at  not  more  than  half  or  less  than  quarter 
salary.  The  court  thought  the  difference  intentional  and  designed  to 
encourage  voluntary  retirement.  It  held  that  though  a  disabled  police- 
man might  of  right  retire  at  half  salary,  the  commissioner  might  retire 
him  at  less  than  half.331  A  statute  which  permits  retirement  at  a 
monthly  pension  of  half  the  monthly  salary  entitles  a  person  whose 
salary  is  paid  quarterly  to  retire  on  a  monthly  pension  sufficient  to 
make  in  a  year  one-half  his  annual  salary.332  Where  an  officer  entitled 
to  receive  and  receiving  board  and  lodging  free,  is  retired  on  half 
pay,  the  value  of  board  and  lodging  are  not  to  be  reckoned  as  part 
of  his  pay,333  nor  is  a  separate  allowance  for  special  duties  a  part  of 
pay.334 

A  right  to  an  accumulated  leave  of  absence  at  full  pay  (if  in  the 
judgment  of  the  department  head  the  exigencies  of  the  department 
permit)  is  incident  to  active  service,  and  is  lost  by  compulsory  retire- 
ment on  pension  at  half  pay,  and  there  is  no  right  to  the  full  pay  or 
to  compensation  for  its  loss.335  Where,  on  a  policeman's  death,  the 
amounts  which  have  been  deducted  from  his  salary  for  the  fund  are 
payable  to  his  widow,  amounts  deducted  under  a  previous  law  and 
paid  into  a  different  fund,  presumably  exhausted,  are  not  included.330 

Queen  v.  Lord  Leigh  (1897).  1  Q.  B.  132. 

Rudolph  v.  U.  S.  (1913),  41  App.  Dist.  of  Col.  29. 

Beal  v.  Bingham  (1908),  60  Misc.  Rep.  539,  112  N.  Y.  Supp.  465. 

State  v.  Knowles  (1911),  145  Wis.  523,  130  N.  W.  451. 

Goodwin  v.  Sheffield  Corp.  (1902),  1  K.  P.  629. 

Upperton  v.  Ridley  (1903),  A.  C.  281. 

Baker  v.  Williams   (New  So.  Wales,  1912),  12  S.  R.  449,  29  W. 

Burke  v.  Board  (1906),  4  Cal.  App.  235,  87  P.  421. 


324  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

IX.     PENSION  FUNDS 
a.*   Rights  of  Beneficiaries 

One  who  enters  upon  or  continues  in  public  employment  in 
expectation  of  receiving  a  pension  from  an  established  pension  fund 
does  not  thereby  acquire  any  interest  in  the  fund  except  in  a  very 
limited  sense.  There  is  no  implied  contract  that  if  he  will  remain  in 
service  the  city  or  state  will  make  good  the  expectations  which  the 
pension  system  holds  out.337  There  is  no  implied  declaration  that  it 
will  hold  the  fund  in  trust  to  fulfill  the  purposes  for  which  it  has 
been  accumulated. 838  Nor  does  an  expecting  beneficiary  acquire  any 
interest  in  the  fund  from  the  fact  that  it  is  supplied  partly  or  wholly 
by  amounts  deducted  from  salaries  in  pursuance  of  a  requirement  of 
law.  The  provision  for  the  so-called  deduction  is  in  fact  a  diminution 
of  salary.330  The  lessened  salaries  are  paid  in  full,  the  percentages 
deducted  are  public  money  and  go  into  the  fund  as  such.340  Until  the 
event  has  happened  which  by  the  law  as  it  exists  at  that  time  confers 
on  a  beneficiary  a  right  to  a  pension,  he  has  a  mere  expectation  of 
acquiring  the  right,  and  the  expectation  will  be  defeated  if  the  gov- 
ernment repeals  the  law,341  or  without  supplying  other  moneys  devotes 
the  fund  to  another  purpose,342  or  if  the  officer  or  employe  resigns 
or  is  dismissed  or  removed,343  or  if  his  office  or  position  is  abolished.344 
In  none  of  these  cases  is  he  entitled  to  a  refund  of  salary  compulsorily 
deducted345  or  to  compensation,  for  nothing  which  is  his  has  been 
taken  from  him.346 

Where  deductions  from  salary  are  made  only  in  case  of  persons 
who  elect  to  participate  in  pension  benefits,  or  where  the  participants 

337.  Pecoy  v.  Chicago  (1914),  265  111.  78;  Clarke  v.  Police  Ins.  Board 
(1898),  123  Cal.  24,  55  P.  576;  State  v.  Board  (1904),  121  Wis.  44,  98  N.  W. 
954;  MacFarland  v.  Bieber  (1909),  32  App.  Dist.  of  Col.  513;  and  cases  in 
notes  106,  107,  108. 

338.  Pecoy  v.   Chicago,  sup.;   Pennie  v.   Reis    (1889),    132  U.   S.  464 
(repeal  of  pension  law  does  not  deprive  of  property). 

339.  Pecoy   v.    Chicago;  sup;    Helliwell   v.    Sweitzer    (1917),   278   111. 
248;  Pennie  v.  Reis,  sup.;  State  v.  Board,  sup.;  MacFarland  v.  Bieber,  sup.; 
People  v.  Coler  (1902),  71  App.  Div.  584,  76  N.  Y.  Supp.  205,  affirmed  173 
N.  Y.  103,  65  N.  E.  956. 

340.  Burke  v.  Board  (1906),  4  Cal.  App.  421,  87  P.  424. 

341.  Pecoy  v.  Chicago,  sup.;   Pennie  v.  Reis,  sup.;   Clarke  v.   Police 
Ins.  Board,  sup.;  State  v.  Board,  sup.;  and  cases  in  notes  106,  107,  108. 

'  342.     Hughes  v.  Treager  (1914),  264  111.  612  (semble). 

343.  Clarke  v.  Reis  (1891),  87  Cal.  543,  25  P.  759. 

344.  See  Lazenby  v.  Elmira  Police  Board   (1902),  76  App.   Div.   171, 
78  N.  Y.  Supp.  302. 

345.  Clarke  v.   Reis    (1891),   87   Cal.   543,   25    P.   759    (no   refund   on 
removal). 

346.  Clarke  v.  Board  (1898),  123  Cal.  24,  55  P.  576  (no  claim  for  sur- 
render value  of  expectation  of  death  benefit). 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  325 

contribute  their  own  money  to  the  fund,  it  is  only  in  a  limited  sense 
that  they  thereby  acquire  any  interest  in  the  fund.  The  fact  that  one 
has  voluntarily  contributed  for  many  years  and  would  soon  be  entitled 
to  retire  on  pension  gives  no  right  to  be  retained  in  employment  or 
office.847  And  the  state  or  municipality  does  not  by  accepting  contri- 
butions incur  any  obligation  to  carry  out  the  pension  scheme  or  to 
use  the  fund  in  paying  pensions.318  Nevertheless  expectant  beneficiaries 
have  some  right  in  respect  to  the  pension  fund.  So  long  as  the  pen- 
sion law  remains  in  force  they  have  a  real  concern  in  having  the  fund 
kept  intact.  The  duty  to  manage  the  fund  which  the  law  imposes  on 
the  pension  board  is  imposed  for  the  beneficiaries'  benefit,  and  would 
seem  to  render  the  board  their  fiduciaries.  If  so,  a  court  of  equity 
would  protect  their  interests,  as  by  enjoining  a  misappropriation  of 
the  fund.  It  has  accordingly  been  held  that  a  person  presently  entitled 
to  a  pension,  though  he  has  not  yet  applied  for  it,  from  a  fund  con- 
tributed to  by  deductions  from  salaries,  may  maintain  a  bill  in  behalf 
of  all  contributors  who  may  become  entitled  to  pensions  in  future  to 
enjoin  unauthorized  payments  from  the  fund,  joining  as  defendants, 
in  a  single  suit,  the  pension  board  and  all  persons  who  seek  unauthor- 
ized payments  from  it,  though  they  act  independently  of  each  other.3*9 

Moreover,  if  a  municipality  accepts  contributions  to  a  pension 
fund,  whether  paid  directly  or  by  election  to  have  a  percentage  deducted 
from  salary,  and  will  not  carry  out  the  plan,  it  should  return  the  money, 
if  it  has  it.  And  an  obligation  to  return  the  money  may  arise  where 
the  contribution  was  based  on  mistake  or  was  illegally  exacted.  These 
obligations  have  been  recognized  in  the  following  cases: 

Certain  policemen  consented  to  a  deduction  from  their  salaries 
for  a  pension  fund  on  the  mistaken  understanding  that  under  the  law 
a  like  amount  was  to  be  paid  in  from  the  salaries  of  other  policemen. 


347.  People    v.    Chicago    (1917),    278    111.    318    (teacher    discharged); 
People  v.  Coler  (1903).  173  N.  Y.  103,  65  N.  E.  956,  affirming  71  App.  Div. 
584,  76  N.  Y.  Supp.  205,   1026,  legislature  may  abolish  office.     That  deduc- 
tions were  voluntary  in  part,  see  People  v.  McClave  (1886),  102  N.  Y.  468, 
7  N.  E.  406);  People  v.  Peck  (1902),  73  App.  Div.  89,  76  N.  Y.  Supp.  328 
(may    remove    without   actual    cause,    police    board's    decision    that   ground 
for  removal   exists  being  final);    Lazenby  v.  Elmira   Police   Board    (1902), 
76  App.  Div.  171,  78  N.  Y.  Supp.  302  (position  abolished  because  services  no 
longer  needed). 

348.  In   re   Bristol    (1916),   173   App.   Div.  545,   160  N.   Y.   Supp.  410, 
affirming  93  Misc.  626,  158  N.  Y.  Supp.  503  (pension  repealed  after  voluntary 
deductions  from  salary);  and  see  Gibbs  v.  Minn.  etc.  Ass.  (1914),  125  Minn. 
174,  145  N.  W.  1075,  Ann.  Cas.  1915C  749,  and  Minegar  v.  Minn.  etc.  Ass. 
(1914),  126  Minn.  332,  148  N.  W.  279  (dues  paid  to  relief  association). 

349.  O'Connor  v.  Trustees  of  Firemen's  Pension  Fund  (1910),  155  111. 
App.  460,  affirmed  247  111.  54. 


326  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Because  it  was  not  paid  in  the  fund  proved  insufficient.  The  court 
took  the  view  that  since  the  pension  scheme  to  which  they  believed 
they  were  contributing  could  not  be  carried  out,  they  were  entitled 
to  a  refund,  though  pensions  already  granted  would  have  to  be 
reduced.850 

A  pension  fund  for  city  teachers  was  made  up  partly  of  excise 
money  and  partly  of  a  percentage  of  the  salaries  of  those  who  elected 
to  participate  in  the  benefits.  School  janitors  were  eligible  at  first, 
but  by  a  later  law  were  excluded.  It  was  thought  that  no  right  of 
the  continuing  members  was  violated  by  devoting  the  fund  to  a  new 
pension  scheme  in  harmony  with  the  original  purpose.  But  it  was  held 
that  the  trustees,  who  were  authorized  to  pay  "obligations"  from  the 
fund,  had  authority  to  return  to  the  excluded  janitors  the  amount  of 
their  contributions  with  interest.851 

Under  a  void  law  sums  were  withheld  from  teachers'  salaries  and 
paid  into  a  pension  fund,  and  the  fund,  under  a  later  and  valid  statute, 
was  mingled  with  a  fund  for  teachers  who  consented  to  deductions 
from  salary.  It  was  held  that  a  non-consenting  teacher  was  not  con- 
fined to  a  suit  for  salary  withheld  under  the  void  law,  but  had  a  claim 
to  be  paid  out  of  the  fund  so  far  as  it  had  been  increased  at  his  expense, 
and  that  the  board  in  control  of  the  fund  had  authority  to  pay  to  him, 
and  it  was  said  that  it  ought  to  do  so.352 

In  a"  Connecticut  case,  the  court  went  further.  A  teachers'  pen- 
sion fund  was  in  fact  wholly  formed  from  deductions  from  salaries 
of  consenting  teachers  and  from  gifts.  The  law  specified  that  it 
should  also  be  made  up  of  "such  other  methods  of  increment  as 
may  be  duly  and  legally  devised,"  but  the  court  said  that  an  annuity 
due  under  the  law  was  not  a  pension  granted  by  the  state  and  that 
the  fund  was  not  a  state  fund.  It  was  held  that  the  acceptance 
of  a  contribution  from  a  teacher  gave  rise  to  a  contract  by  the  state 
that  whatever  conditions  for  pensions  might  be  established,  the  pen- 
sions should  be  granted  if  the  conditions  were  fulfilled,  and  that  an 
amendment  to  the  law  which  made  retirement  on  pension  subject  to 
the  approval  of  the  board,  whose  opinion  as  to  whether  the  conditions 
were  fulfilled  should  be  final,  impaired  the  obligation  of  the  contract 
and  was  void.353 

350.  Murray  v.  Buckley  (1888),  1  N.  Y.  Supp.  247. 

351.  In  re   Bristol   (1916),   173   App.   Div.  545,   160  N.  Y.   Supp.  410, 
affirming  93  Misc.  626,  158  N.  Y.  Supp.  503. 

352.  Venable  v.  Schafer  (1906),  28  Ohio  Cir.  Ct.  Rep.  202. 

353.  Ball  Y.  Board  of  Trustees  (19Q4),  71  N-  J-  L.  64,  58  A.  Ill, 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  327 

b.     Sources 

\Yhere  policemen  receive  salaries  in  lieu  of  fees,  but  costs  taxed 
against  convicted  criminals  include,  under  the  name  of  fees,  charges 
for  policemen's  services  in  travel,  attendance  at  court  and  custody  of 
offenders,  such  "charges  when  collected  fall  within  a  statutory  pro- 
vision that  fees  paid  for  policemen's  services  shall  be  paid  into  the 
police  pension  fund.854 

\Yhere  amounts  withheld  from  teachers'  pay  for  absence  are  to 
be  certified  and  paid  by  the  board  of  education  to  the  state  comptroller 
for  the  teachers'  retirement  fund,  and  a  sum  is  so  withheld  and  certified, 
but  afterwards,  the  absence  being  excused,  paid  to  the  teacher,  it  is 
not  "withheld"  within  the  meaning  of  the  statute,  for  the  provision 
is  not  intended  to  involve  the  board  of  education  in  expense  beyond 
the  salary  list.  The  fund  is  to  get  only  what  teachers  do  not  get.355 

Under  the  Park  Policemen's  act  of  1917,  the  pension  board  is 
bound  to  accept  the  estimate  of  the  superintendent  of  insurance  as 
to  the  amount  of  money  needed  to  pay  pensions  and  maintain  a  reserve, 
and  embody  it  in  its  report  to  the  park  commissioners;  and  the  com- 
missioners must  accept  it  and  make  it  the  amount  of  the  tax  which  the 
law  directs  them  to  levy.350 

The  tax  levy  for  1915  for  firemen's  and  policemen's  pensions  in 
Chicago  was  valid,  because,  being  expressly  authorized  by  the  legisla- 
ture, it  was  not  subject  to  the  requirements  of  the  general  tax  law.357 

X.     POWERS  AND  DUTIES  OF  PENSION  BOARDS 
a.     Nature  of  Power  Exercised 

A  pension  board,  being  an  administrative  body,  cannot  be  vested 
with  power  to  determine  whether  and  on  what  conditions  pensions 
shall  be  granted,  or  to  grant  such  pensions  as  it  sees  fit,  for  it  belongs 
to  the  legislature  alone  to  determine  questions  of  policy  and  to  make 
the  determination  effective  by  creating  new  legal  rights.  A  statute 
which  purported  to  authorize  a  board  to  grant  or  to  fix  the  conditions 
for  pensions  without  expressly  or  impliedly  imposing  any  rule  or  prin- 
ciple by  which  to  determine  its  action  would  be  void  as  an  attempt  to 
confer  legislative  power  upon  an  administrative  body.358  Nevertheless, 
the  separation  of  governmental  powers  is  not  intended  to  stand  in  the 

354.  State  v.  Oshkosh  (1917)  —  Wis.  —    166  N.  W.  37. 

355.  People  v.  Cook  (1917),  100  Misc.  Rep.  276,  166  N.  Y.  Supp.  637. 

356.  Trustees  v.  Comrs.  of  Lincoln  Park   (1918),  282  111.  348. 

357.  People  v.  Daemicke   (1917),  278  111.  53. 

358.  Noel  v.  People   (1900),   187  111.  587  /an  act  authorizing  a  board 
of   pharmacy   in    its   discretion    to   issue   permits    to    sell    patent    medicines 
under  such   restrictions  as  it  may  deem  proper  is  void);   Hewitt  v.   State 

22 


328  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

way  of  effective  legislation.359  It  is  impossible  to  provide  in  advance 
for  every  contingency  so  that  the  officers  who  administer  the  laws  shall 
always  have  a  definite  rule  to  guide  their  conduct  and  shall  never  be 
obliged  to  exercise  discretion.  Therefore  it  is  sufficient  if  the  legisla- 
ture fixes  as  definitely  as  is  practicable  the  principles  and  rules  upon 
which  pensions  are  to  be  awarded  and  empowers  a  pension  board 
or  commissioner  to  apply  them  to  cases  as  they  arise,  though  the  appli- 
cation involves  in  some  degree  a  determination  of  matters  of  policy.360 
So  a  pension  board  may  be  empowered  to  fix  the  amount  of  pension 
between  limits,361  and  to  withhold  a  pension  altogether  for  want  of 
merit  in  the  applicant  or  for  other  sound  reason.302 

It  is  sometimes  said  that  in  determining  an  application  for  a 
pension  a  board  acts  judicially.  What  is  meant  is  that  its  work 
resembles  that  of  a  court  in  the  nature  of  the  questions  it  has  to  decide 
and  of  the  mental  operations  involved  in  the  decision,  or  that,  like  the 
judgment  of  a  court,  its  grant  of  a  pension  is  final  and  confers  a  right 
which  it  cannot  revoke.363  But  a  pension  board  differs  from  a  court 
in  the  scope  and  effect  of  its  decisions.  It  does  not  exercise  judicial 
power.  It  only  decides  for  itself  what  it  shall  do,  and  the  decision  is 
not,  as  is  the  judgment  of  a  court,  an  adjudication  upon  the  rights  of 
others,  although  the  fact  that  the  board  has  acted  and  granted  or  denied 

Board  of  Medical  Examiners  (1906),  148  Cal.  590,  84  P.  39,  3  L.  R.  A.  (N. 
S.),  896,  113  Am.  St.  Rep.  315,  7  Ann.  Cas.  750  (authority  to  revoke  licenses 
of  physicians);  State  v.  Gt.  No.  Ry.  Co.  (1907),  100  Minn.  445,  111  N.  W. 
289,  10  L.  R.  A.  (N.  S.)  250  (authority  to  control  increases  of  corporate 
stock). 

359.  Buttfield   v.    Stranahan    (1904),    192  U.    S.   470,   496;    Brewer,   J., 
in  Chicago  v.  Dey  (1888),  35  Fed.  866,  874,  1  L.  R.  A.  744. 

360.  U.  S.  v.  Grimaud  (1910),  220  U.  S.  506. 

361.  People  v.  Martin  (1895),  145  N.  Y.  253.  39  N.  E.  960. 

362.  Gleason  v.   Board    (1914),  92   Kans.  632,   141   P.  584   (may  deny 
pension    to-  infirm    paupers    if    poorhouse    relief   more    suitable);    Coots    v. 
Detroit  (1889),  75  Mich.  628,  43  N.  W.  17,  5  L.  R.  A.  315;  People  v.  Matsell 
(1883),  94  N.  Y.  179;  People  v.  French  (1887),  46  Hun  232;  People  v.  Martin 
(1892),  131  N.  Y.  196,  30  N.  E.  60  (may  deny  pension  from  insufficiency  of 
fund  and   for  misconduct);   People  v.   Martin    (1895),   145   N.   Y.  253,  39  N. 
E.  960  (may  dismiss  for  misconduct  instead  of  pensioning;  Tobin  v.  Scan- 
nell  (1901),  64  App.  Div.  375,  72  N.  Y.  Supp.  184;  Friel  v.  McAdoo  (1905), 
101   App.   Div.   155,  91    N.  Y.  Supp.  454,  affirmed   181   N.  Y.  558,  74  N.   E. 
1117;  People  v.  Bingham  (1910),  198  N.  Y.  274,  91  N.  E.  "580;  State  v.  Verner 
(1889),  30  S.  Car.  277,  9  S.  E.  113  (discretion  to  approve  pensions  to  soldiers' 
widows).    Parliament  may  vest  in  commissioners  an  uncontrolled  discretion 
to  grant  or  withhold  pensions.    Cooper  v.  Queen   (1880),  14  Ch.   Div.  311; 
Yorke  v.  Rex  (1915),  1  K.  B.  852. 

363.  See  Eddy  v.  People  (1905),  218  111.  611;  Lochren  v.  Long  (1895), 
6  App.  Dist.  of  Col.  486;  Ramsey  v.  Hayes  (1907),  187  N.  Y.  367,  80  N.  E. 
193;  Stokely  v.  De  Camp  (1849),  2  Grant's  Cas.  (Pa.  Sup.  Ct.),  17;  The  King 
v.  Local  Govt.  Board  (1910),  2  Irish  Rep.  440. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  329 

a  pension  may,  like  any  other  occurrence,  affect  their  rights.    Since 
its  action  is  not  a  judgment,  no  appeal  lies  to  a  court.364 

b.     The  Duty  to  Award  Pensions  and  Its  Enforcement 

As  a  person  aggrieved  by  the  refusal  of  a  city  officer  to  pay  a 
debt  owed  by  the  city  may  sue  the  city,  so  a  person  aggrieved  by  a 
pension  board's  action  may  bring  original  proceedings  in  court  to 
enforce  whatever  rights  he  has.  The  power  and  duty  of  the  board  to 
act  and  the  truth  of  the  alleged  facts  upon  which  it  based  its  action 
are  open  to  question  in  any  proceeding  in  which  they  are  relevant.  If 
no  statute  provides  otherwise,  a  court's  control  over  a  pension  board 
rests  on  the  same  principles  which  determine  its  control  over  persons 
and  officers  in  general.  So  long  as  the  board  acts  within  its  authority 
and  fulfills  its  duties,  it  violates  no  legal  rights.  If  it  exceeds  its  author- 
ity its  act  will  be  treated  as  unauthorized,  and  if  it  violates  a  legal 
right,  the  violation  will  be  redressed  by  appropriate  means. 

If  an  applicant  has  a  legal  right  to  a  pension,  and  it  is  refused,  the 
board  may  be  mandamused  to  grant  it  to  him ;  if  without  authority  it 
has  removed  a  pensioner  from  the  rolls,  it  will  be  directed  to  restore 
him  and  to  pay  his  pension.  If  he  has  not  a  right  to  a  pension,  but  only 
a  right  to  have  the  board  hear  his  case  and  decide  whether  to  give 
him  a  pension,  that  right  will  be  enforced.  The  difficulty  lies  in  ascer- 
taining precisely  what  the  rights  and  duties  are  between  applicants  and 
boards  under  the  various  pension  laws. 

A  person  who  has  fulfilled  the  preliminary  requirements  for  a 
pension  is  entitled,  when  he  applies  for  it,  to  have  the  board  give 
adequate  consideration  to  his  case.  If  it  refuses  to  do  so  it  denies  his 
right  and  mandamus  will  issue  to  compel  it  to  perform  its  duty.305  He 
also  has  a  right  to  have  the  board  grant  him  a  pension  provided  he 
duly  proves  his  case  before  the  board  and  the  board  really  thinks  him 

364.  Board  v.  McCrory  (1909),  132  Ky.  89,  116  S.  W.  326.    But  it  is 
constitutional  to  provide  by  statute  for  a  review  by  a  court,  not  to  adjudi- 
cate   rights    as    between    parties,    but    solely   to    secure    the    conformity    of 
executive  action  to  the  law.- U.  S.  v.  Duell  (1898),  172  U.  S.  576;  Minn.  etc. 
R.  Co.  v.  R.  R.  Comm.   (1908),  136  Wis.  146,  116  N.  W.  905,   17  L.  R.  A. 
(N.  S.),  821.    Compare  Aurora  v.  Schoeberlcin  (1907),  230  111.  496. 

365.  People   v.    French    (1887),   46   Hint  232    (where   board   with   dis- 
cretion to  refuse  pension  refuses  it  on  the  erroneous  ground  that  on  the 
admitted  facts  the  law  forbids  its  grant,  mandamus  will  issue  to  require  it 
to    consider    application    on    the    basis    that    the    law   does    not    forbid    it); 
Rudolph   v.    Moshenvel    (1911),   37   App.    Dist.   of   Col.   76   (where   pension 
refused  to  disabled  discharged  fireman  on  the  erroneous  ground  that  he  could 
not  have  pension  because  discharged,  mandamus  will  issue  to  pension  board 
to  cause  assembling  of  examining  board  to  determine   whether  he  is  dis- 
abled); Stevens  v.  Minneapolis  etc.  Ass.  (1914),  124  Minn.  381,  145  N.  W. 
35   (action  for  pension  allowed,   there  being  no  objection  to   the   form  of 
remedy);  Rex.  v.  Treasury  (1909),  2  K.  B.  183  (board  empowered  to  appor- 


330  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

entitled  to  it.  If  the  board's  refusal  of  a  pension  is  shown  to  be  in 
bad  faith,  mandamus  will  issue  to  compel  it  to  grant  a  pension.  So,  too, 
in  any  case  where  the  board  clearly  abuses  its  discretion,  it  is  subject 
to  mandamus,  because  the  abuse  is  a  refusal  to  perform  its  duty.366 

If  the  law  provides  that  on  specified  conditions  a  person  shall  be 
granted  a  pension,  and  contains  no  qualifying  clause,  such  as  that 
satisfactory  proof  shall  be  made  of  the  facts,  or  that  the  board's 
decision  shall  be  conclusive,  it  may  be  construed  to  confer  a  right  to 
have  a  pension,  or,  which  is  the  same  thing,  to  impose  "on  the  board 
a  duty  to  grant  it,  provided  those  conditions  are  in  fact  fulfilled  and 
the  pension  is  applied  for,  and  reasonably  sufficient  evidence  of  ful- 
fillment, if  that  is  expressly  or  impliedly  a  condition,  duly  made.  If 
then  the  board  makes  an  erroneous  decision  and  refuses  the  pension, 
it  is  denying  a  legal  right,  and  mandamus  will  issue  to  enforce  the 
right  by  directing  the  board  to  grant  the  pension.  This  construction 
is  placed  upon  section  three  of  the  police  act  of  1887,  and  upon  pro- 
visions similarly  worded  in  other  acts.307 

In  some  jurisdictions,  however,  statutes  will  not  be  so  construed. 
Some  courts  consider  that  where  a  pension  must  come  through  action 

tion  pension  between  two  funds  must  make  apportionment) ;  and  see 
Calder  v.  Chicago  (1913),  176  111.  App.  313  (board,  it  seems,  may  be  man- 
damused  to  make  a  decision,  though  not  bound  to  decide  for  applicant). 

But  if  the  board  has  heard  as  much  evidence  as  it  reasonably  thinks 
necessary  for  a  fair  decision,  it  is  no  ground  of  complaint  that  it  refused 
to  hear  all  the  relevant  evidence  offered.  And,  it  seems,  it  is  not  necessary 
to  notify  applicant  of  the  time  and  place  where  he  may  be  heard,  if  he 
can  learn  it  by  inquiry,  nor  to  hear  him  or  his  witnesses  in  person,  provided 
opportunity  is  given  him  to  present  his  case  in  writing.  The  King  v.  Local 
Govt.  Board  (1911),  2  Irish  Rep.  331. 

366.  Tobin  v.  Scannell  (1901)  64  e  App.  Div.  375,  72  N.  Y.  Supp.  184 
(though  the  statute  says  that  commissioner  shall  determine  circumstances 
of  case,  and  payment  of  pension  not  obligatory,  nor  a  matter  of  legal  right, 
it  does  not  empower  him  to  refuse  pension  without  cause;  and  if  he  does 
not   show   cause,   he   will   be   mandamused   to   grant   pension);   Williams  v. 
Giddy   (1911),  A.  C.  381,  affirming  Giddy  v.  Williams,   11    New  So.   Wales 
St.   Rep.    181    (award  of  a  penny  a  year  held  a  refusal  to  fix  amount  of 
pension);   Ramsey  v.   Hayes    (1907),   187   N.   Y.  367,  80   N.   E.   193,  semble 
(pension  unjustifiably  fixed  at  less  than  half  salary). 

367.  Ryan  v.  Foreman   (1914),  262  111.   175   (adopted  child  is  entitled 
like   natural   child   to   continuance    of   retirement   pension.     Facts   admitted 
by  demurrer);  Stiles  v.  Board  (1917)  281  111.  636  (park  policeman  entitled 
to  pension  though  dismissed.*  Facts  admitted);  Hess  v.  Board   (1913),  188 
111.  App.  8  (act  for  cities  of  less  than  50,000  entitles  policemen  to  retire- 
ment after  twenty  years   service  though   not   continuous.    Facts   admitted 
by  demurrer.    It  seems  that  right  to  pension  accrues  as  soon  as  applica- 
tion  is   filed);   State   v.    Board    (1917),    141    La.   427,   75   So.    103    (fireman's 
widow   shall   be   entitled   to   pension   and   placed   on    rolls);    State   v.    Love 
(1914),  95   Neb.  573,   145   N.  W.   1010  (city  shall  pension  all   firemen  who 
have  served  twenty-one  years  and  elect  to  retire);  Matter  of  Tobin  (1900), 
164  N.  Y.  532,  58  N.  E.  650,  affirming  53  App.  Div.  483,  66  N.  Y.  Supp.  97 
($1000  to  be   paid   to    fireman's   widow);    People  v.    Partridge    (1903),    174 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  331 

by  a  commissioner  or  by  a  board,  the  real  duty  is  only  to  give  adequate 
consideration  to  the  case  and  to  award  the  pension  if  the  applicant  is 
thought  to  be  entitled  to  it.  In  this  view  a  favorable  opinion  of  the 
board  is  a  condition  of  the  right  to  a  pension.  As  with  a  court,  the 
board's  duty  is  to  render  a  decision,  not  to  decide  in  a  particular  way, 
however  plain  the  case.  Mandamus  will  not  lie  to  compel  the  grant 
of  a  pension  no  matter  how  clearly  it  appears  that  the  refusal  to  grant 
it  was  based  on  misconception,  whether  of  fact  or  law.368 

The  same  result  is  everywhere  reached  when  the  statute  contains 
special  words  that  show  intent  to  make  a  favorable  opinion  of  the 
board  a  condition  of  the  right  to  have  a  pension.369  Where  such  words 
are  found  there  can  be  no  mandamus  to  grant  a  pension  unless  the 
facts  on  which  the  claim  rests  were  brought  by  suitable  allegations  to 
the  attention  of  the  board,370  and  proved  to  its  satisfaction.371 


N.  Y.  526,  66  N.  E.  1107,  reversing  78  App.  Div.  204,  79  N.  Y.  Supp.  722 
(by  mistake  of  law  board  thought  policeman's  appointment  illegal);  and 
see  People  v.  Greene  (1905),  181  N.  Y.^  308,  73  N.  E.  1111  (where  veteran 
after  twenty  years  service  must  be  retired  on  pension  on  application,  his 
retirement  is  accomplished  by  the  application). 

368.  Decatur  v.  Paulding  (1840),  14  Pet.  497;  U.  S.  v.  Black  (1888), 
128  U.  S.  40;  Miller  v.  Raum  (1890),  18  D.  of  C.  (7  Mackey),  556;  Lochren 
v.  Long  (1895),  6  App.  D.  of  C.  486;  Karb  v.  State  (1896),  54  Ohio  St.  383, 
43  N.  E.  920;  Board  v.  McCrory  (1909),  132  Ky.  89,  116  S.  W.  326  (semble). 
And  see  Yannatta  v.  Smith  (1897),  61  N.  J.  L.  188,  38  A.  811. 

369.  Calder  v.  Chicago  (1913),  176  111.  App.  313  (it  seems  that  making 
board's    decision    final    prevents    mandamus    to    grant    pension) ;    Wilke    v. 
Wilson   (1913),   176   111.  App.  319   (same  point);   People  v.   Martin    (1892), 
131   N.  Y.   196,  30  N.   E.  60  (board  to  have  discretion);   People  v.  Martin 
(1895),  145  N.  Y.  253,  39  N.  E.  960  (board  to  act  "by  a  majority  vote"); 
State  v.  Board  (1906),  117  La.  1071,  42  So.  506  (board's  decision  "final  and 
not  subject  to   review."    Mandamus   will   not  lie   for   plain  error   of  law) ; 
State  v.  Verner  (1889),  30  So.  Car.  277,  9  S.  E.  113  (soldier's  widow  entitled 
to  pension  on  board's  approval  of  application);   Cooper  v.   Queen    (1880), 
14    Ch.    Div.    311    ("no   person    shall    have   an    absolute    right    to    pension." 
Malins,  V.  C.,  said:    "As  I  read  the  acts  of  Parliament,  it  is  a  right  which 
can  never  be  enforced  in   the  civil  tribunals  of  this  country.    *    *    *    The 
Crown  in  fact  says  'This  is  what  we  intend  to  give  you,  but  as  a  matter  of 
bounty   only;   you   shall   have   no   legal   right   whatever.'");    Yorke   v.    Rex 
(1915),  1  K.  B.  852  (no  increase  of  pension  where  commissioner's  decision 
is  final  as  to  amount,  though  decision  erroneous). 

370.  Calder  v.   Chicago   (1913),   176   111.   App.  313;   Wilke  v.   Wilson 
(1913),  176  111.  App.  319. 

371.  People  v.   Board   (1901),  95   111.   App.   300   (when  pension  is  to 
fireman  "found  on  examination  ordered  by  the  board  to  be  disabled  so  as 
to  render  his  retirement  necessary,"  the  board  is  final  judge  of  the  neces- 
sity of  retirement);   Benner  v.   Chicago   (1913),   176  111.  App.   317;   People 
v.  McCrory  (1909),  132  Ky.  89,  116  S.  W.  326;  Stevens  v.  Minneapolis  etc. 
Ass.   (1914),   124  Minn.  381,  145  N.  W.  35;  Smith  v.  The  Crown   (Western 
Australia,   1914),   17  Commonwealth   L.  R.  356   (where  Governor's  decision 
is  made  final  it  binds  though  unsupported  by  the  evidence). 


332  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

This  doctrine  may  result  in  the  denial  of  a  pension  to  one  who 
has  fulfilled  the  conditions  which  entitle  him  to  apply  for  it,  but  this 
is  because  it  is  considered  that  the  legislature  has  seen  fit  to  entrust 
the  decision  to  the  pension  board.  It  is  not  infrequently  the  case  that 
administrative  action  which  adversely  affects  important  interests  may 
be  valid  and  final  though  based  on  mistake.372  And  it  is  to  be  observed 
that  on  a  similar  principle,  the  decision  of  a  court,  though  wrong,  is 
valid,  if  within  its  authority,  and  hence  may  have  the  effect  of  nulli- 
fying an  authorized  act  of  a  pension  board.  Thus  as  a  court  may 
under  some  circumstances  mandamus  a  board  to  place  an  applicant 
upon  the  pension  rolls,  it  has  authority,  upon  a  petition  for  mandamus, 
to  determine  whether  the  case  is  a  proper  one  for  the  writ  to  issue, 
and  if  it  decides,  though  wrongly,  to  issue  the  writ,  the  writ  is  valid 
and  must  be  obeyed;  and  unless  and  until  the  decision  is  reversed,  it 
constitutes  an  adjudication  that  the  petitioner  is  entitled  to  a  pension, 
which  is  conclusive  against  all  the  world.373 

To  what  extent  the  right  to  a  pension  is  dependent  upon  favorable 
action  by  the  board  is  a  question  the  answer  to  which  may  vary  with 
the  language  of  the  particular  pension  law.374  There  may  be  a  statute 
of  intermediate  character  which,  without  giving  an  absolute  right  to 
favorable  action  by  the  board,  does  nevertheless  impose  on  the  board 
a  duty  beyond  that  of  awarding  such  pensions  as  upon  their  view  of 
the  law  and  the  facts  they  believe  to  be  due.  The  intent  may  be  to 
impose  a  duty  to  grant  the  pension  if,  on  the  facts  as  the  board  con- 
siders them  to  be,  the  conditions  for  pension  are  fulfilled.  Such  a 
statute  virtually  says  to  the  board :  "If  these  facts  are  true  and  you 
are  satisfied  of  it,  place  the  applicant  upon  the  rolls."  Then  the  board 
is  subject  to  mandamus  if  it  admits  the  facts  and  refuses  the  pension 
because  it  misconstrues  the  law.  This  would  seem  to  be  the  case  with 
those  police  pension  laws  that  provide  that  on  death  in  service  leav- 
ing a  widow,  the  board  "on  satisfactory  proof  of  such  facts"  shall 
pension  the  widow.375  Perhaps  this  is  also  the  case  though  the  law 
provides  that  the  board's  decision  shall  be  conclusive  and  not  subject 

372.  Aurora  v.  Schoeberlein  (1907),  230  111.  496  (when  police  board 
is  authorized" to  remove  officer  if  charges  are  proved  to  its  satisfaction,  a 
court  can  give  no  remedy  though  the  board  is  mistaken);  U.  S.  v.  Ju  Toy 
(1905),  198  U.  S.  253  (where  an  official  is  authorized  to  deport  a  person 
of  Chinese  race  attempting  to  enter  the  United  States,  if  he  decides  him 
to  be  an  alien,  a  court  cannot  prevent  deportation,  though  he  is  a  native 
citizen). 

373     O'Connor  v.  Board  of  Trustees  (1910),  247  111.  54. 

374.  Stiles  v.  Board  (1917),  281  111.  636. 

375.  See  People  v.  Armstrong  (1915),  196  111.  App.  199. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  333 

to  review.376  It  has  been  held  that  in  spite  of  these  words  service 
pensions  to  firemen  who  admittedly  have  not  served  for  the  required 
period  are  invalid.377 

As  was  said  above,  the  question  in  all  these  cases  is  whether  the 
board  has  acted  within  its  authority.  If  the  law  does  not  require  it  to 
grant  a  pension,  a  court  cannot  compel  it  to  do  so.  If  the  law  does 
require  the  grant,  a  court  will  enforce  the  requirement.  The  question 
is  the  same  where  a  pension  has  been  awarded  and  its  validity  is  in 
issue.  If  the  award  was  authorized  the  pension  is  valid,  though 
awarded  by  mistake.  But  it  will  be  invalid  if  the  existing  facts  did 
not  give  authority  to  make  the  award,  or  if  the  award  was  made  in 
an  unauthorized  mode.  So  where  children  of  a  deceased  pensioner 
were  entitled  to  a  grant  of  the  arrears  of  his  pension,  and  the  Secre- 
tary of  War  awarded  the  arrears  to  one  of  the  children  only,  it  was 
held  that,  as  the  Secretary  had  authority  to  make  an  award,  the  grant 
was  binding,  and  that  another  child  could  not  sue  the  first  for  a  share 
of  the  money.378  So,  too,  where  pensions  are  provided  for  widows  of 
policemen  who  die  of  disease  contracted  in  performance  of  duty,  a 
board  has  authority  when  a  policeman  dies  of  disease  to  decide  whether 
it  was  contracted  in  performance  of  duty,  and,  if  it  so  decides  in  good 
faith  and  upon  evidence,"  to  grant  a  pension.  No  court,  therefore,  can 
set  aside  the  grant  though  it  was  wrong.379  But  it  would  seem  that  it 
is  only  in  case  of  a  policeman  that  the  board  could  grant  a  pension, 
and,  if  so,  a  grant  made  to  the  widow  of  a  person  mistakenly  supposed 
to  have  been  a  policeman  would  be  unauthorized  and  void.  A  ques- 
tion might  be  raised  whether  the  authority  was  also  conditioned  on 
the  policeman's  being  really  dead,  on  the  woman  being  in  fact  his 
widow,  and  on  his  death  being  from  disease.  An  award  made  to  a 
person  not  of  the  class  entitled  to  pension  is  invalid,  even  though  the 
board's  decision  is  made  conclusive  and  not  subject  to  review,  for 
the  provision  applies  only  to  cases  in  which  the  board  has  authority 
to  act.380 


376.  See   dissenting  opinion   in    State  v.   Board   (1906),   117  La.    1071, 
42  So.  506;  and  cases  in  note  391,  post. 

377.  O'Connor  v.  Trustees   Firemen's   Pension   Fund   (1910),    155   111. 
App.  460. 

378.  Stokely  v.  De  Camp  (Pa.  Sup.  Ct.  1849),  2  Grant's  Cas.  17. 

379.  State  v.  Board  (1908),  138  Wis.  133,  119  N.  W.  806,  20  L.  R.  A. 
(  X.  S.),  1175;  Smith  v.  The  Crown  (Western  Australia,  1914),  17  Common- 
wealth L.  R.  356;  U.  S.  v.  Lalone   (1890),  44  Fed.  475,  semble;  The  King 
v.  Local  Govt.  Board  (1910),  2  Irish  Rep.  440,  451,  452,  456,  semble. 

.  380.  O'Connor  v.  Trustees  Firemen's  Pension  Fund  (1910),  155  111. 
App.  460  (pension  under  act  of  1887  to  fireman  known  to  have  served  less 
than  twenty-two  years,  and,  if  disabled,  to  have  retired  before  pension 
granted). 


334  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

To  have  a  right  to  a  pension  is  not  equivalent  to  having  a  pension. 
It  will  not  support  an  action  as  for  pension  money  due.  A  law  which 
establishes  a  pension  fund  and  a  board  to  administer  it  will  not  ordi- 
narily be  construed  as  conferring  on  the  beneficiaries  more  than  a 
right  to  have  pensions  granted  by  the  board,  because  if  there  could 
be  claims  against  the  fund  except  for  pensions  awarded  its  condition 
at  a  given  time  could  less  surely  be  ascertained,  and  pensions  awarded 
would  be  less  secure.381  But  if  the  statute  intends  to  confer  a  right  to 
pension  money,  action  for  money  due  will  lie.382 

Pension  laws  often  speak  of  trustees  and  beneficiaries  of  the  fund ; 
but  though  there  may  be  a  fiduciary  relation,  there  is  strictly  no  trust 
relation.  A  right  to  be  awarded  a  pension  is  a  legal  right  only,  and 
will  be  barred  by  the  provisions  of  the  statutes  of  limitations  applicable 
to  the  legal  remedies  by  which  it  is  attempted  to  enforce  the  right.383 

The  authority  of  pension  boards  to  revoke  or  discontinue  pensions 
has  been  already  discussed.384  When  a  pensioner  is  dropped  from  the 
rolls  without  authority,  mandamus  lies  to  compel  his  restoration,385  or 
certiorari  may  be  a  proper  remedy  to  review  and  quash  the  order 
dropping  him.886 

c.     Compulsory  Retirement  on  Pension 

Statutes  in  New  York  authorize  fire  and  police  commissioners 
compulsorily  to  retire  on  pension  members  of  their  departments  who 
are  superannuated387  or  disabled.  Here,  too,  the  validity  of  the  order 


381.  Ramsey  v.  Hayes  (1907),  187  N.  Y.  367,  80  N.  E.  193,  reversing 
112  App.  Div.  442,  98  N.  Y.  Supp.  394  (where  pension  is  to  be  for  half  salary 
if  the  fund  will  warrant,  and  a  smaller  pension  is  awarded,  the  remedy  is 
by  mandamus  to   increase   the   award,   not  by   action   for   the   difference); 
Stokely  v.  De  Camp  (1849),  2  Grant's  Cas.  (Pa.  Sup.  Ct),  17;  Edmunds  v. 
Atty.  Gen.  (1878),  47  Law  Journal  (N.  S.),  Eq.  345,  38  Law  Times  213,  26 
Weekly  Rep.  550. 

382.  Moore  v.  Board  (1907),  121  App.  Div.  862,  106  N.  Y.  Supp.  983, 
affirmed  in  195  N.  Y.  614,  89  N.  E.  1105  (where  pension  is  to  be  half  salary 
and  a  smaller  pension  is  awarded,  action  lies  for  the  balance  of  an  install- 
ment due) ;  De  La  Ronde  v.  Ottawa  Police  Ass.   (Ontario,   1912),  3  Dom. 
L.  R.  328,  6  Dom.  L.  R.  850  (police  relief  ass.);  and  see  People  v.  Greene 
(1905),  181  N.  Y.  308,  73  N.  E.  1111. 

383.  Nichols  v.   Board    (1905),   1    Cal.   App.  494,  82   P.   557;   State  y. 
Holmes   (1915),  23   Ohio  Cir.  Ct.   Rep.    (N.  S.),   133;   Lund  v.  Minneapolis 
etc.  Ass.  (1917),  137  Minn.  395,  163  N.  W.  742. 

384.  See  Section  VII.   f.    Fraud,  mistake  and  change  of  circumstances. 

385.  Eddy  v.  People  (1905),  218  111.  611,  affirming  120  111.  App.  626; 
Rudolph  v.  U.  S.  (1913),  41  App.  D.  of  C.  29;  Tyson  v.  Board  (1910),  139 
Ky.  256,  129  S.  W.  820;  Board  of  Police  Com'rs.  v.  McClenehan  (1917),  — 
Md.  — ,  101  A.  786:  Queen  v.  Lord  Leigh  (1897),  1  Q.  B.  132. 

386.  Dickey  v.  Jackson  (1917),  —  Iowa  — ,  165  N.  W.  387;  The  King 
v.  Local  Govt.   Board   (1910),  2  Irish  Rep.  440;  The  King  v.   Local  Govt. 
Board  (1911),  2  Irish  Rep.  331. 

387.  The  police  board  may  retire  on  pension  a  policeman  sixty  years 
old.    People  v.  Bingham  (1910),  198  N.  Y.  274,  91  N.  E.  530,  reversing  135 
App.  Div.  813,  120  N.  Y.  Supp.  186. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  335 

depends  upon  whether  the  commissioner  was  acting  within  his  author- 
ity. Where  his  authority  is  to  act  on  his  determination  of  a  fact,  the 
act  is  valid  though  the  determination  is  wrong.388  But  where  his 
authority  depends  on  the  existence  of  the  fact,  action  based  on  a  wrong 
determination  is  invalid.  Thus  authority  to  dismiss  and  pension  dis- 
abled policemen  is  not  authority  to  dismiss  a  policeman  who  is  certified 
by  examining  surgeons  to  be  disabled  and  is  believed  to  be  so,  and  if 
he  is  not  disabled  he  may  have  mandamus  for  reinstatement.389  But 
a  provision  that  the  commissioner  shall  retire  a  policeman  on  pension 
upon  a  surgeon's  certificate  showing  that  he  is  disabled  authorizes  and 
it  seems  requires  a  compulsory  retirement  if  the  certificate  is  made  in 
good  faith,  though  untrue.390  Yet  where  a  proviso  in  the  firemen's 
act  adds  that  if  a  person  so  certified  is  fit  for  inactive  duty  he  shall 
be  given  employment,  he  is  held  to  be  entitled  to  employment,  if 
actually  fit,  though  the  commissioner  thinks  otherwise,  and  though  a 
clause  provides  that  in  every  case  the  commissioner  is  to  determine 
the  circumstances.391  Though  the  commissioner  is  to  determine  the 
circumstances,  his  authority  is  conditioned  on  a  real  determination, 
and  an  order  of  retirement  made  purely  to  get  rid  of  the  member  is 
void;  and  if  he  acts  on  the  report  of  surgeons  who  had  made  no 
examination,  the  order  is  not  binding.392  Where  power  is  given  to 
retire  a  disabled  policeman  on  pension,  and  a  certificate  of  disability 
is  a  condition  of  power  to  pension,  it  seems  it  is  also  a  condition  of 
the  power  to  compel  retirement.393  Where  retirement  for  permanent 
disability  is  to  be  based  on  the  examiner's  report,  an  order  of  retire- 
ment is  void  if  neither  it  nor  the  report  states  or  conclusively  shows 
that  the  disability  is  permanent.894 

388.  Matter  of  Reynolds  v.  Bingham   (1908),   126  App.  Div.  289,   110 
N.  Y.  Supp.  520. 

389.  Hodgins  v.  Bingham  (1909),  196  N.  Y.  123,  89  N.  E.  423,  reversing 
128  App.  Div.  151,  112  N.  Y.  Supp.  543. 

390.  People  v.  Bingham  (1908),   125  App.   Div.  722,  110  N.  Y.  Supp. 
136,  affirmed  193  N.  Y.  610,  86  N.  E.  1131;  People  v.  Bingham  (1910),  121 
N.  Y.  Supp.  273,  66  Misc.  Rep.  219,  affirmed  137  App.  Div.  901,  122  N.  Y. 
Supp.  1141. 

391.  People  v.  Hayes  (1910),  122  N.  Y.  Supp.  104,  66  Misc.  Rep.  531; 
People  v.  Sturgis  (1903),  85  App.  Div.  20,  82  N.  Y.  Supp.  953,  affirmed  176 
N.  Y.  563,  68  N.  E.  1123  (at  least  where  commissioner  acted  without  notice 
to  fireman  and  on  insufficient  evidence).    An  order  of  retirement  that  does 
not  show  facts  which  negative  the  right  to  inactive  employment  is  void. 
People  v.  Adamson  (1916),  173  App.  Div.  773,  159  N.  Y.  Supp.  1021. 

392.  People  v.  Scannell  (1901),  70  N.  Y.  Supp.  1042,  34  Misc.  Rep.  709. 

393.  Hodgins  v.  Bingham  (1908),  128  App.  Div.  151,  112  N.  Y.  Supp. 
543. 

394.  People  v.  Bryant  (1898),  28  App.  Div.  480,  51  N.  Y.  Supp.  119. 


336  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

A  compulsory  retirement  on  pension  for  disability  is  not  a  removal 
within  a  statute  which  protects  army  veterans  from  removal,395  or 
within  the  civil  service  law.396 

Though  mandamus  lies  for  reinstatement  where  relator  has  been 
retired  without  authority,  he  must  not  sleep  upon  his  rights,  and  if 
he  waits  without  excuse  for  two  years,  and  in  the  meantime  he  has 
accepted  pension  money  or  his  office  has  been  rilled,  the  court  may 
deny  relief.397 


395.  People  v.  Scannell  (1900),  164  N.  Y.  572,  58  N.  E.  1091,  affirming, 
on  opinion  below,  53  App.  Div.  161,  65  N.  Y.  Supp.  832. 

396.  People  v.  Bryant  (1898),  28  App.  Div.  480,  51  N.  Y.  Supp.  119, 
semble.     Compare  People  v.  Board  (1903),  79  N.  Y.  710,  reversed  on  another 
point  in  174  N.  Y.  450. 

397.  People  v.  Bryant  (1898),  28  App.  Div.  480,  51  N.  Y.  Supp.  119. 

NOTE 

The  following  cases  from  the  British  overseas  Dominions  turn  on 
provisions  of  pension  laws  so  dissimilar  to  those  of  the  United  States  that 
they  have  little  or  no  application  to  our  pension  systems.  Cases  of  more 
immediate  application  are  referred  to  in  the  body  of  the  chapter. 

Privy  Council  Cases 

Giddy  v.  Williams  (1911),  A.  C.  381,  11  S.  R.  181. 

Main  v.  Stark  (         ),  15  A.  C.  384,  affirming  14  Vic.  L.  R.  98. 

Smythe  v.  Regina  (1898),  A.  C.  782,  23  Vic.  L.  R.  383,  19  Aust.  L.  T.  118, 

3  Aust.  L.  R.  253. 

Walker  v.  Simpson  (1903),  A.  C.  208. 

Williams  v.  Curator   (1909),  A.  C.  353,  reversing  on  different  ground 

4  Com.  L.  R.  694. 

Williams  v.  Macharg  (1910),  A.  C.  476,  affirming  7  Com.  L.  R.  213,  9 
S.  R.  116,  which  affirmed  Macharg  v.  Williams/ 1907),  7  S.  R.  792,  but  disap- 
proving the  ground  of  decision  in  Hales  v.  Milliard  (1905),  5  S.  R.  166. 

Australian  Cases 

Bale  v.  Miller,  4  S.  R.  652,  21  W.  N.  250. 

Bristow  v.  Queen  (Vic.  1895),  16  A.  L.  T.  147. 

Casey  v.  The  King  (1913),  16  Com.  L.  R.  92,  19  A.  L.  R.  64,  (1913),  V. 
L.  R.  34,  affirming  (1913)  V.  L.  R.  34,  34  A.  L.  T.  120. 

Cheek  v.  State  Fund  Board  (1913),  8  Tasmania  L.  R.  63. 

Clarke  v.  Queen  (1897  Vic.),  18  A.  L.  T.  244,  3  A.  L.  R.  (C.  N.)  18. 

Dettman  v.  Williams  (1906),  3  Com.  L.  R.  43,  12  A.  L.  R.  60,  affirming 
(1905)  5  S.  R.  265.  22  W.  N.  81. 

Fullarton  v.  Queen,  9  Vic.  L.  R.  181,  5  A.  L.  T.  64. 

Glen  v.  Williams  (1912),  12  S.  R.  504,  29  W.  N.  130. 

Hales  v.  Miller,  5  S.  R.  163,  22  W.  N.  46. 

Hendy  Pooley  v.  Commonwealth  (1912),  13  Com.  L.  R.  609. 

Josephson  v.  Young  (1901),  21  N.  So.  W.  L.  R.  188,  17  W.  N.  12. 

Manton  v.  Williams,  4  Com.  L.  R.  1046,  7  S.  R.  236,  24  W.  N.  45. 

Markham  v.  Williams  (1914),  17  Com.  L.  R.  418,  14  S.  R.  178,  31  W.  N.  4, 
affirming  13  S.  R.  1,  30  W.  N.  8. 

Matson  v.  Queen,  2  Vic.  L.  R.  233,  3  A.  J.  R.  27. 

Miller  v.  Stephen  (1914),  17  Com.  L.  R.  397,  14  S.  R.  181,  31  W.  N.  4, 
reversing  13  S.  R.  44,  30  W.  N.  31,  12  S.  R.  235/29  W.  N.  61. 

Mills  v.  Queen,  14  Vic.  L.  R.  940,  10  A.  L.  T.  148. 

Russell  v.  Reid  (1898),  19  N.  So.  W.  L.  R.  (L.)  48,  14  W.  N.  202, 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


337 


State  of  New  So.  Wales  v.  Commonwealth  (1908),  6  Com.  L.  R.  214. 
Witt  v.  Queen  (1897  Vic.),  3  A.  L.  R.  (C.  N.)  89. 

Woodman  v.  Queen  (Vic.  1895),  17  A.  L.  T.  137,  1  A.  L.  R.  (C.  N.)  22 
Oct. 

Young  v.  Queen  (Vic.  1897),  3  A.  L.  R.  32. 

Indian  Cases 

See  Bose's  Digest  of  Indian  Law  Cases,  under  Pensions. 
New  Zealand  Cases 

Dinnie  v.  The  King  (No.  2),  (1916),  New  Zealand  Gazette  Law  Rep.  42. 
McGrath  v.  Minister  (1911),  30  N.  Z.  L.  R.  729,  13  Gaz.  L.  R.  325. 
Williams  v.  Queen,  7  N.  Z.  L.  R.  435. 

South  African  Cases 

Barry  v.  Minister  (1912),  So.  Af.  L.  R.  (Transval  Prov.  Div.)  114. 
Greville  v.  Minister  (1913),  So.  A.  L.  R.  (Trans.  P.  D.)  700. 
Union  Govt.  v.  Scales  (1913),  So.  Afr.  L.  R.  App.  Div.  333. 
Waller  v.  Natal  Govt.  (1906),  27  Natal  Law  Rep.  188.  ^ 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  339 


CHAPTER  XVII 


DIGEST  OF  ILLINOIS  PENSION  LAWS 
ENACTED  IN  1917 


Index  of  Chapter 

LAWS 
Firemen :  Pages 

In  Cities  of  More  than  200,000  Inhabitants  (Chicago) 345-348 

In  Cities  of  Not  Less  than  5,000  nor  More  than  200,000  Inhabitants 349-351 

Policemen : 

In  Cities  of  Not  Less  than  200,000  Inhabitants   (Chicago) 352-355 

In  Cities,  Villages  and  Towns  of  Not  Less  than  100,000  Nor  More  than  200,000 

Inhabitants  356 

In  Cities,  Villages  and  Towns  of  Not  Less  than  5,000  nor  More  than  100,000  In- 
habitants  357-359 

Employed  by  Boards  of  Park  Commissioners   360-363 

Municipal  Employes: 

In  Cities,  Villages  and  Towns  of  More  than  100,000  Inhabitants  (Chicago) 364-366 

House  of  Correction  Employes: 

In  Cities  of  More  than   150,000  Inhabitants  (Chicago) 367 

Teachers  in  Public  Schools: 

In  this  State,  Except  Those  Employed  in  Cities  or  School  Districts  of  More 
than  65,000  Inhabitants,  Where  Teachers'  Pension  Funds  Were  in  Operation 
Before  July  1.  1915,  viz.,  Chicago  and  Peoria 368 

In  School  Districts*  of  Not  Less  than  10,000  Nor  More  than  100,000  Inhab- 
itants ( Peoria)  369 

In   State    Educational,    Charitable  and   Correctional   Institutions....  ,..369-371 


340  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

SUBJECTS,  AND  NOTES  RELATED  THERETO 
1. — Amounts  of  Pensions  to  Employes: 

Firemen    in    Chicago    (Note) 347 

Firemen-in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 350 

Policemen    in    Chicago    (Note)    353 

Policemen  in  Cities,  Villages  and  Towns  of  5,000  to  100,000  Inhabitants   (Note)  358 

Policemen   Employed  by  Park  Boards   (Note) 361 

Municipal   Employes  in   Chicago   365 

Teachers  in   State   Institutions    37] 

2. — Amounts  of  Pensions  to  Dependents: 

Firemen  in  Chicago   (Note) 347 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants  (Note)..  351 

Policemen  in^ Chicago   (Note)    354 

Policemen  in  Cities,  Villages  and  Towns  of  5,000  to  100,000  Inhabitants  (Note)  358 

Policemen   Employed  by   Park  Boards  (Note) 362 

3. — Beneficiaries : 

Firemen   in    Chicago    (Note)    345 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 349 

Policemen   in    Chicago    (Note)    352 

Policemen  in  Cities,  Villages  and  Towns  of  100,000  to  200,000  Inhabitants  (Note)  356 

Policemen  in  Cities,  Villages  and  Towns  of  5,000  to  100,000  Inhabitants  (Note)..  357 

Policemen  Employed  by  Park  Boards   360 

Municipal   Employes  in  Chicago    364 

Teachers  in   State   Institutions    369-370 

4.— Burial  Benefit: 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants  (Note)..  351 

5. — Conditions  for  Pensions  to  Employes: 

Firemen  in   Chicago   ( Notes)    346 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants  (Note)..  350 

Policemen  in   Chicago   (Note)    353 

Policemen    Employed   by    Park    Boards    (Note) 361 

Municipal   Employes  in   Chicago    (Note)    365 

Teachers  in   State   Institutions    370-371 

6. — Conditions  for  Pensions  to  Dependents: 

Firemen  in  Chicago   (Note)    347 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants   (Note)..  351 

Policemen  in  Chicago   (Note)    % 353 

Policemen  Employed  by  Park  Boards  (Note)    362 

7.— Disability: 

(See   "Conditions   for   Pensions   to    Employes";   also   "Provisions  for   Discontin- 
uance of  Pensions  to  Employes.") 

8. — Discontinuance  of  Pensions  to  Employes: 

Firemen   in   Chicago 347 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 351 

Policemen   in    Chicago    • 

Policemen   Employed  by   Park   Boards 

Municipal    Employes  in   Chicago    (Note)    365 

Teachers   in   State   Institutions    370 

9. — Discontinuance  of  Pensions  to  Dependents: 

Firemen"  in    Chicago    .• 347 

Firemen  in   Cities,  Villages  and  Towns   of  5,000  to   200,000   Inhabitants 351 

Policemen  in  Chicago   (Note)    354 

Policemen    Employed   by   Park    Boards    (Note) 363 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  341 

Pages 
10. — Emergency  Duty  by  Retired  Employe: 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 351 

11. — Employes  Who  Served  in  U.  S.  Military  or  Naval  Forces  During  1861-1865: 

Municipal  Employes  in  Chicago  (Note)    366 

12. — Exemption  of  Pension  from  Attachment,  Seizure,  etc.: 

Firemen  in  Chicago   ( Note)    348 

Firemen  in   Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 351 

Policemen    Employed   by   Park   Boards    363 

Teachers  in  State  Institutions  371 

13. — Fund  Insufficient;   Pensions  Pro-Rated: 

Firemen   in    Chicago    347 

Firemen  in   Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 351 

14. — Investments : 

Firemen  in  Chicago   ( Note)    348 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 351 

•         Policemen    in    Chicago 355 

Policemen    Employed   by   Park   Boards    363 

Teachers  in  State  Institutions   371 

15. — Limitation  of  Income  of  Fund: 

Policemen  in  Cities,  Villages  and  Towns  of  5,000  to  100,000  Inhabitants  (Note)..  358 

16. — Limitation  of  Payments  by  Employes: 

Firemen    in    Chicago    ( Note)    346 

Firemen  in   Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 350 

Policemen   in   Chicago   (Note)    352 

Policemen   Employed  by  Park  Boards   (Note)    361 

Municipal    Employes   in    Chicago    (Note) 364-365 

Teachers  in  State  Institutions   370 

1 7. — Management : 

Firemen   in   Chicago    345 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 349 

Policemen   in    Chicago    352 

Policemen  in  Cities,  Villages  and  Towns  of  5,000  to   100,000  Inhabitants   (Note)  357 

Policemen  Employed  by  Park  Boards   360 

Municipal    Employes  in  Chicago   : 364 

Teachers  in  State  Institutions   370 

18. — Option   Regarding  Participation  in  Fund: 

Teachers   in    State    Institutions    371 

19. — Provisions  Not  in  This  Digest:    (See  "All  Other  Provisions") 

Policemen    in    Chicago    355 

Policemen  in  Cities,   Villages  and  Towns  of  100,000  to  200,000  Inhabitants 356 

Policemen  in   Cities,  Villages  and  Towns  of  5,000  to   100,000   Inhabitants 359 

House  of  Correction   Employes  in  Chicago 367 

20. — Reduction  of  Pensions: 

Firemen   in  Chicago   (Notes)    347 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 351 

Policemen  in  Chicago   ( Note)    353,354 

Policemen   Employed  by   Park  Boards    (Notes) 361,  362 

Municipal   Employes  in   Chicago   (Note)    365 


342  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

21.— Refunds: 

Firemen   in   Chicago    346 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 350 

Policemen    in    Chicago    353 

Policemen   Employed  by  Park  Boards    361 

Municipal   Employes  in  Chicago    365 

Teachers   in   State    Institutions    370,  371 

22. — Repeal  of  Act: 

Policemen   Employed  by   Park  Boards    363 

23.— Reports: 

Firemen  in  Chicago   (Note)    348 

Firemen   in   Cities,   Villages  and  Towns  of  5,000  to   200,000   Inhabitants 351 

Policemen   in    Chicago    (See   "Reserve   Fund,"   etc.)    (Note) 355 

Policemen    Employed  by    Park   Boards    (Note)    363 

Municipal    Employes   in    Chicago    (Note) 365 

Teachers  in    State   Institutions    (See   "Deductions   from   Salaries,"   etc.) 371 

24. — Reserve  Funds: 

Firemen  in  Chicago   ( Note)    348 

Firemen    in    Cities,    Villages    and    Towns    of    5,000    to    200,000    Inhabitants    (See 

"Revenue   from   Other   Sources")    (Note) 350 

Policemen  in  Chicago   (Note)    355 

Policemen  Employed  by  Park  Boards   (Note) 363 

25. — Revenue  from  Employers  and  Other  Sources: 

Firemen    in    Chicago    (Note)    346 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants   (Note)..  349 

Policemen  in   Chicago    (Note)    352 

Policemen  in  Cities,  Villages  and  Towns  of  5,000  to  100,000  Inhabitants  (Notes)  358 

Policemen   Employed  by  Park  Boards   (Note) 360 

Municipal    Employes  in   Chicago    (Note) 364 

House  of  Correction    Employes  in   Chicago    (Note) 367 

Teachers  in  Public  Schools  Throughout  the  State   (Notes) 368,  369 

Teachers  in   Public  Schools  in   Peoria   (Note) 369 

Teachers   in   State    Institutions 370 

26. — Revenue  from  Employes: 

Firemen  in  Chicago   ( Note)    346 

Firemen  in   Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants 349 

Policemen  in   Chicago   (Note) 352 

Policemen  in  Cities,  Villages  and  Towns  of  5,000  to  100,000  Inhabitants   (Note)  357 

Policemen    Employed   by    Park    Boards    (Note) 360-361 

Municipal   Employes  in   Chicago    (Note)    364 

Teachers   in    State   Institutions    370,  371 

27. — State  Superintendent  of  Insurance:    (Duties,  Reports) 

Firemen  in   Chicago    (See  "Reports")    (Note) 348 

Policemen   in   Chicago   (See  "Reserve  Funds,"  etc.)    (Note) 355 

Policemen    Employed  by    Park   Boards    (See  "Reports,"   etc.)    (Notes) 363 

Municipal   Employes  in  Chicago   (See  "Reports,"  etc.)    (Note)    365 

28. — Taxes  for  Pension  Funds:    (See  "Revenue  from  Other  Sources") 

Firemen    in    Chicago    (Note)    348 

Firemen  in   Cities,  Villages  and  Towns  of  5,000  to  200,000  Inhabitants  (Note)..  351 

Policemen  in   Chicago   (Note)    352 

Policemen  in  Cities,  Villages  and  Towns  of  5,000  to  100,000  Inhabitants   (Note)  358 

Policemen    Employed  by    Park    Boards    (Note) 360 

Municipal    Employes  in    Chicago    (Note) 364 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


343 


Pages 
29. — Titles  of  Acts: 

Firemen  in    Chicago    345 

Firemen  in  Cities,  Villages  and  Towns  of  5,000  to  200,000   Inhabitants 349 

Policemen   in    Chicago    352 

Policemen  in  Cities,  Villages  and  Towns  of   100,000  to  200,000   Inhabitants 356 

Policemen  in   Cities,  Villages  and  Towns  of  5,000  to   100,000  Inhabitants 357 

Policemen  Employed  *y  Park  Boards 360 

Municipal    Employes   in    Chicago    364,  366 

House  of  Correction   Employes  in  Chicago   367 

Teachers  in   Public   Schools  Throughout  the   State    368,369 

Teachers  in  Public  Schools  in   Peoria   369 

Teachers   in    State    Institutions 369 

30. — Workmen's  Compensation : 

Firemen    in    Chicago    (Note)    347 

Policemen  in  Chicago   (Notes)    353,  354 

Policemen   Employed  by  Park  Boards   (Notes)    361,  362 

Municipal   Employes   in   Chicago    (No,te)    365 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  J45 


CHAPTER  XVII 


DIGEST  OF  ILLINOIS  PENSION  LAWS 
ENACTED  IN  1917 


With  Comparative  Notes  Concerning  Laws  Previously 

in  Effect 


FIREMEN'S  PENSION   FUND— CHICAGO 


Act  Filed  June  14,  1917,  in  Force  July  1,  1917.    Laws  of  111.  p.  260— 
Hurd  R.  S.  1917,  Ch.  24,  Sees.  417-419K 


Title 

"An  Act  to  provide  for  a  firemen's  pension  fund  and  to  create  a  board  of 
trustees  to  administer  said  fund  in  cities  having  a  population  exceeding  200,000 
inhabitant*  " 

Beneficiaries 

Firemen  employed  in  paid  fire  departments  in  cities  of  more  than  200,000 
inhabitants  and  the  widows,  children,  and  dependent  parents  of  such  firemen. 

The  term  "firemen"  includes  all  persons  appointed  to  any  position  classified 
as  in  the  fire  service  in  cities  which  have  adopted  the  Civil  Service  Act  of  March 
20,  1895,  all  persons  appointed  to  any  position  in  the  fire  department  in  cities 
which  have  not  adopted  said  Civil  Service  Act,  and  all  persons  who  were  con- 
tributing to  the  firemen's  pension  fund  in  existence  at  the  time  this  Act  became 
effective.  (Sec.  13.) 

Retired  firemen  and  widows,  children,  and  dependent  parents  of  deceased 
firemen  who  were  entitled  to  pensions  under  any  other  firemen's  pension  law 
in  force  at  the  time  this  Act  became  effective,  are  entitled  to  benefit  under  this 
Act.  (Sec.  14.) 

Any  fireman  who  shall  have  served  five  years  and  been  a  member  of  this 
pension  fund  a  like  period  shall  not  be  removed  from  it  in  case  of  involuntary 
transfer  to  another  department  of  the  same  city;  provided  he  shall  continue 
to  contribute  to  this  fund  as  before  such  transfer.  (Sec.  13.) 

NOTE:    Matter  in  foregoing  paragraph  was  not  in  law  in  effect  in  1916. 

Participation  is  compulsory.     (Sec.  2,  a.) 

Management 

Board  of  eight  trustees  composed  of  the  city  treasurer,  city  clerk,  marshal 
or  chief  officer  of  the  fire  department;  comptroller  or  chief  officer  of  the  finance 


346  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

department,  ex  officio;  three  active  firemen  elected  by  the  active  firemen,  and 
one  retired  fireman  elected  by  the  retired  firemen — each  for  terms  of  two  years. 
(Sec.  3.) 

City  clerk  is  secretary  of  the  board.     (Sec.  3.) 

Expense  of  administration  is  borne  by  the  fund.     (Sec.  5.) 

City  treasurer  is  custodian.     (Sec.  6.) 

Revenue  from  Employes 

Two  and  one-half  per  cent  of  salaries  from  those  in  active  service.  (Sec. 
1,  a.) 

A  sum  equal  to  5%  of  salary  at  date  of  retirement  from  firemen  who  retire 
after  service  of  20  years  before  attaining  age  of  50  years.     (Sec.  1,  b.) 
NOTE:     In  1916,   1%  of  salary.     The  5%  provision  was  not  in  effect. 

Revenue  from  Other  Sources 

A  tax  of  5/10  of  a  mill  on  each  dollar  of  taxable  property  in  such  city. 
(Sec.  2.) 

NOTE:    Tax  in   1916   was  3/10   of  a   mill   for  a  period  of  three  years   beginning 
in  1915. 

All  fines  and  penalties  imposed  upon  firemen  for  violating  rules  of  the  fire 
department.  (Sec.  2,  c.) 

All  rewards,  fees,  gifts,  etc.,  to  members  of  the  fire  department,  except  when 
retention  is  allowed  by  competitive  award.  (Sec.  2,  d.) 

All  moneys  or  property  acquired  from  any  source  by  the  Board  of  Trustees. 
(Sec.  2,  f.) 

The  city  may  (has  power  to)  appropriate  all  of  the  tax  or  license  fees  col- 
lected from  foreign  fire  insurance  companies  to  this  fund.  (Act  which  became 
a  law  May  31,  1895,  in  force  July  1,  1895,  as  subsequently  amended.  Laws  of 
111.  1915,  p.  284.  Kurd  R.  S.  1917,  Ch.  24,  Sec.  420.) 

Limitation  of  Payments  by  Employes 

Deductions  from  salaries  from  date  of  entrance  into  service  to  date  of 
retirement  upon  pension,  or  death. 

Contributions  from  date  of  retirement  until  attainment  of  age  of  50  years 
if  retired  before  that  age  for  any  cause  other  than  disability. 
NOTE:    Latter  requirement  not  in  effect  in   1916. 

Refunds 

No  provision. 
Conditions  for  Pensions  to  Employes 

For  Service  Pension:  Minimum  term  of  service  20  years,  the  last  5  years 
of  which  must  be  continuous  and  attainment  of  50  or  more  years  of  age.  Fire- 
men who  serve  20  or  more  years,  the  last  5 -years  being  continuous,  and  who 
then  are  less  than  50  years  of  age,  may  retire,  and  thereafter  contribute  a  sum 
equal  to  5%  of  salary  received  at  date  of  retirement  until  attainment  of  age  of 
50  years  and  receive  pensions  thereafter.  (Sec.  8.) 

NOTE:    In  1916  pensions  were  granted  at  any  age  after  service  for  20  years,  the 
last  2  years  of  which  were  continuous. 

Firemen  who  may  be  discharged  after  service  of  20  years,  the  last  5  years 
being  continuous,  shall  be  entitled  to  pensions  in  accordance  with  the  provisions 
stated  above.  (Sec.  8.) 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  347 

For  Disability  Pension :  At  any  time  while  in  active  service  or  on  leave  of 
absence  when  so  mentally  or  physically  disabled  as  to  render  retirement  neces- 
sary. (Sec.  9.) 

Disability  pensioners  shall  be  examined  at  least  once  each  year  by  physicians 
selected  by  the  Board  of  Trustees.     (Sec.  5,  E.) 
NOTE:    Not  in  law  in  effect  in   1916. 

Amount  of  Pension  to  Employes 

One-half  of  salary  at  date  of  retirement  but  not  less  than  $600  nor*more 
than  $3,000  a  year.  (Sees.  8  and  9.) 

NOTE:    In   1916,  one-half  salary  without  limitation. 

Pensions  Reduced  by  Workmen's  Compensation 

If  any  fireman  receives  any  sum  or  sums  of  money  under  the  "Workmen's 
Compensation  Act,"  his  pension  shall  be  reduced  by  said  sum  or  sums.     (Sec.  9.) 
NOTE:    Not  in  law  in  effect  in   1916. 

Provisions  for  Discontinuance  of  Employes  Pensions 

When  disability  ceases,  pension  payments  are  discontinued  and  fireman  is 
restored  to  former  rank  in  the  department.     (Sec.  9.) 
Conditions  for  Pensions  to  Dependents 

If  a  fireman  dies  from  any  cause  while  in  service,  or  during  retirement  on 
account  of  disability,  or  after  20  or  more  years  of  service,  pensions  shall  be 
paid  to  the  following:  (Sec.  10.) 

Widow  who  shall  have  married  such  fireman  before  his  retirement  upon 
pension.  This  restriction  as  to  time  of  marriage  applies  only  to  widow  who 
married  since  June  30,  1915.  (Sec.  10,  a.) 

Natural  children  under  18  years  of  age.     (Sec.  10,  b.) 

NOTE:    In   1916  children  were  pensioned  only  to  the  age  of   16  years. 

Father  and  mother  of  such  firemen  if  he  was  their  sole  and  only  support 
and  no  widow  or  natural  children  under  age  of  18  years  survive  him. 
(Sec.  10,  c.) 

Amounts  of  Pensions  to  Dependents 
Widow— $45.00  a  month  (Sec.  10,  a.) 
Children — $10.00  a  month  if  mother  is  alive  (Sec.  10,  a.) 
Children— $15.00  a  month  if  mother  is  dead  (Sec.  10,  b.) 
Parents— $25.00  a  month  to  each  (Sec.  10,  c.) 

If  any  child  over  14  years  of  age  does  not  "attend  school,  the  pension  of  such 
child  shall  be  reduced  $5.00  per  month.  (Sec.  10,  b.) 

NOTE:    In    1916,   children    whose   mothers   were   alive   received   $8.00   per   month. 
There  was  no  provision  for  reduction  if  children  failed  to  attend  school. 

Provisions  for  Discontinuance  of  Dependents'  Pensions 
Widows'  pensions  terminate  upon  marriage.     (Sec.  10,  a.) 
Children's  pensions  terminate  upon  attainment  of  18  years  of  age.     (Sec. 

10,  b.) 

Fund  Insufficient;  Pensions  Reduced  Pro  Rata 

If  there  is  not  enough  money  in  the  fund  to  pay  all  pensions  in  full,  they 
shall  be  reduced  pro-rata  until  the  fund  is  replenished.  (Sec.  11.) 


348  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Reserve  Fund  and  Investments 

The  Board  of  Trustees  has  power  to  establish  and  maintain  a  fund  in  reserve 
and  to  invest  all  or  part  of  it  in  bonds  of  the  United  States,  the  State  of  Illinois, 
or  any  county  or  municipal  corporation  in  Illinois.  (Sec.  5,  d.) 

NOTE:    In   1916  there  was  no  provision  for  a  reserve  fund,  nor  concerning  char- 
acter of  investments.     This  Act  does  not  define  the  term  "reserve"  fund. 

Reports  Concerning  Fund  and  Tax  Therefor 

The  Board  of  Trustees  shall  report  to  the  City  Council  on  or  before  the 
first  Monday  in  September  of  each  year  the  amount  of  taxes  necessary  for  the 
following  fiscal  year. 

They  must  also  report  at  least  once  each  year  to  the  State  Superintendent 
of  Insurance  such  matter  concerning  the  fund  as  he  shall  prescribe  and  the 
State  Superintendent  of  Insurance  shall  report  the  information  so  received 
to  the  Governor.  (Sec.  3.) 

NOTE:    Not  in  law  in  1916. 

Pensions  Exempt  from  Seizure 

Pensions  shall  not  be  subject  to  attachment,  seizure,  etc.,  under  any  legal 
process.  (Sec.  12.) 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  349 


FIREMEN'S  PENSION  FUND— CITIES,  VILLAGES  AND 
TOWNS  OF  5,000  TO  200,000 


Act  Filed  June  28,  1917,  in  Force  July  1,  1917.     Laws  of  Illinois, 
1917,  p.  231— Hurd  R.  S.  1917,  Ch.  24,  Sees.  403-415 


Title 

"An  Act  to  revise  the  law  creating  a  firemen's  pension  fund  in  cities,  vil- 
lages, and  incorporated  towns  of  not  less  than  5,000  and  not  more  than  200,000 
inhabitants." 

Beneficiaries 

Firemen  employed  in  paid  fire  departments  in  cities,  villages,  and  incorpor- 
ated towns  of  more  than  5,000  and  not  in  excess  of  200,000  inhabitants,  and 
their  widows,  children,  and  dependent  parents. 

The  term  "firemen"  includes  all  persons  appointed  to  any  position  classified 
as  in  the  fire  service,  in  cities,  villages,  or  incorporated  towns  which  have  adopted 
the  Civil  Service  Act  of  March  20,  1895;  all  persons  appointed  to  any  position 
in  the  fire  department  in  cities,  villages,  or  incorporated  towns  which  have  not 
adopted  said  Civil  Service  Act ;  all  persons  who,  on  July  1,  1917,  were  entitled  to 
the  benefits  of  the  Firemen's  Pension  Fund  Act,  approved  May  13,  1887,  in  force 
July  1,  1887,  which  applies  to  cities,  villages,  or  incorporated  towns  whose  popu- 
lation exceeds  50,000  inhabitants.  (Sec.  1.)  Participation  is  compulsory. 
(Sec.  3.) 

Management 

Board  of  eight  trustees :  In  cities,  villages,  or  incorporated  towns  where 
there  are  such  officers,  the  treasurer,  clerk,  marshal  or  chief  officer  of  fire  depart- 
ment, and  comptroller  are  ex  officio  members.  Where  there  is  no  comptroller, 
the  mayor  of  the  city  is  substituted.  In  other  villages  or  incorporated  towns, 
the  president  of  the  board  of  trustees  of  such  village  or  town,  the  clerk  and 
attorney  of  such  village  or  town,  and  chief  officer  of  fire  department  are  ex 
officio  members.  (Sec.  2.) 

In  all  cities,  villages  and  towns,  three  of  the  active  firemen,  elected  by  the 
active  force,  and  one  from  the  pensioners  elected  by  retired  firemen,  each  for  a 
term  of  2  years.  (Sec.  2.) 

Expense  of  administration  to  be  paid  from  fund.     (Sec.  3.) 

Treasurer  of  city,  village,  or  town  is  custodian  of  this  fund.     (Sec.  3.) 

Revenue  from  Employes 

Not  to  exceed  1%  of  salary,  deducted  monthly.     (Sec.  3.) 

Revenue  from  Other  Sources 

1.  A  tax  of  3/10  of  a  mill  on  each  dollar  of  taxable  property  in  such  cities, 
villages,  or  towns,  levied  in  1917  and  for  a  period  of  two  years  there- 
after. (Sec..l.) 


350  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Modification:  Tax  levy  may  be  dispensed  with  if  sum  in  fund 
over  and  above  the  "reserve"  fund  is  sufficient  to  meet  all  demands 
of  those  requiring  payment  from  the  fund.  (Sec.  1.) 

NOTE:  Law  in  1916  provided  3/10  mill  tax  should  be  levied  in  1915,  1916,  and 
1917  only.  This  Act  extends  the  period  two  years.  The  above  modifica- 
tion did  not  appear  in  law  in  effect  in  1916. 

2.  One  per  cent  of  all  license  moneys  except  those  from  public  utilities. 
(Sec.  1.) 

3.  All  fines  collected  for  violation  of  the  fire  ordinances,  enforcement  of 
which  are  under  the  supervision  of  the  fire  department. 

4.  Amounts  received  by  members  of  the  department  as  rewards,  gifts,  etc., 
except  when  allowed  to  be  retained  by  competitive  award.     (Sec.  4.) 

5.  Gifts,  grants,  bequests,  etc.,  to  the  board  of  trustees  for  the  benefit  of 
the  fund.     (Sec.  4.) 

6.  Fines  and  penalties  imposed  upon  firemen.     (Sec.  4.) 

7.  Merger  of  funds: 

All  assets  of  the  Firemen's  Pension  Fund  in  existence  at  the  time 
of  the  passage  of  this  Act.     (Sec.  4.) 
"Permanent  fund": 

When  $15,000  have  been  received  and  accumulated  in  cities,  villages, 
or  towns  of  from  5,000  to  25,000  inhabitants,  and  $25,000  have  been 
received  and  accumulated  in  cities,  villages,  or  towns  of  from  25,000 
to  200,000  inhabitants,  such  sums  shall  be  retained  as  permanent 
funds  and  any  sum  in  excess  thereof  shall  be  available  for  the  uses 
and  purposes  of  the  pension  fund.  (Sec.  4.) 

NOTE:  Evidently  the  adjectives  "reserve"  in  Section  1,  and  "permanent"  in  Sec- 
tion 4,  apply  to  the  same  fund. 

8.  The  city,  village,  or  town  may  (has  power  to)  appropriate  all  of  the  tax 
or  license  fees  collected  from  foreign  fire  insurance  companies,  to  this 
fund.     (Act  approved  June  29,  1915,  in  force  July  1,   1915.     Laws  of 
Illinois,  1915,  p.  284.) 

Limitation  of  Payments  by  Employes 

Deductions  from  salaries  from  date  of  entrance  into  service  to  date  of 
retirement  upon  pension,  or  death.  (Sec.  3.) 

Refunds 

No  Provision. 
Conditions  for  Pensions  to  Employes 

For  Service  Pension:  Minimum  term  of  service  20  years,  the  last  2  years 
of  which  must  be  continuous.  After  such  term  of  service,  may  retire  upon  pen- 
sion, or  if  discharged  shall  be  pensioned.  (Sec.  7.)  Same  as  in  1916. 

Age:     No  requirement. 

For  Disability  Pension:  If  permanently,  mentally,  or  physically  disabled 
by  reason  of  service.  (Sec.  5.) 

NOTE:  Provision  in  1916:  "If  so  disabled  as  to  render  retirement  necessary" 
without  reference  to  cause  or  duration  of  disability. 

Amount  of  Pensions  to  Employes 

Sum  equal  to  one-half  salary  at  date  of  retirement,  payable  monthly.  (Sec- 
tions 5  and  7.) 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  351 

Provision  for  Discontinuance  of  Employes'  Pensions 

When  disability  ceases,  pension  payments  are  discontinued  and  fireman  is 
inhabitants,"  approved  June  29,  1915,  in  force  July  1,  1915. 

Condition  for  Pension  to  Dependents 

If  any  fireman  dies  as  the  result  of  injuries  received  "while  in  such  service" 
or  of  disease  contracted  by  reason  of  occupation  as  fireman,  or  of  any  cause 
while  in  service  after  20  years  of  service,  or  during  retirement  after  20  years 
of  service,  pensions  shall  be  paid  to  the  following:  Widow  who  shall  have 
married  such  fireman  before  his  retirement  upon  pension;  the  natural  children 
of  such  fireman  under  16  years  of  age,  born  of  a  wife  married  before  retirement 
upon  pension ;  father  and  mother  of  such  fireman  if  he  was  their  sole  and  only 
support  and  no  widow  or  natural  children  survive  him.  (Sec.  6). 

NOTE:    Law   in    1916:      If  fireman   died   from  any   cause   while  in   active   service 
pensions  were  allowed. 

Amount  of  Pensions  to  Dependents 

Widow — $45.00  per  month. 
Children — $8.00  per  month  if  mothers  are  alive. 
Children — $15.00. per  month  if  mothers  are  dead. 
Parents — $25.00  per  month  to  each.     (Sec.  6.) 

The  total  pension  to  dependents  of  a  deceased  fireman  shall  not  exceed  50% 
of  the  salary  he  received.  (Sec.  6.) 

NOTE:    In  1916  the  law  did  not  contain  the  limitation  stated  above. 

Provision  for  Discontinuance  of  Dependents'  Pensions 

Widows'  pensions  terminate  upon  marriage.  Children's  pensions  terminate 
upon  attainment  of  16  years  of  age.  (Sec.  6.) 

Fund  Insufficient;  Pensions  Reduced  Pro  Rata 

If  there  is  not  enough  money  in  the  fund  to  pay  all  pensions  in  full,  they 
shall  be  reduced  pro  rata  until  the  fund  is  replenished.  (Sec.  6.) 

Payment  of  Expense  of  Burial 

If  a  fireman  dies  and  no  beneficiary  within  the  terms  of  this  Act  exists, 
the  Board  of  Trustees  shall  pay  $200.00  for  the  burial  of  such  fireman.  (Sec.  7.) 

NOTE:    Not  in  law  in  effect  in  1916. 

Investments 

Treasurer  may  not  make  loans  or  deposits  unless  authorized  by  Board  of 
Trustees.  No  provision  concerning  character  of  investments.  (Sec.  11.) 

Reports  Concerning  Fund  and  Tax  Therefor 

On  the  first  Monday  in  November  of  each  year  the  Board  of  Trustees  shall 
report  the  condition  of  the  fund  and  the  amount  of  the  tax  which  must  be  levied 
for  the  following  year  to  the  council  of  such  city,  village,  or  town.  (Sec.  12.) 

Emergency  Duty  by  Retired  Employe 

Board  of  Trustees  may  assign  firemen  retired  on  account  of  age  and  service 
to  performance  of  light  duties  in  the  fire  department  upon  recommendation  by 
the  chief  officer  thereof.  (Sec.  7.) 

Pension  Exempt  from  Seizure 

Pensions  are  exempt  from  attachment,  seizure,  etc.,  under  legal  process. 
(Sec.  13.) 


352  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


POLICEMEN'S   PENSION   FUND— CHICAGO 


Act  Filed  June  14,  1917,  in  Force  July  1,  1917.     Laws  of  111.  1917, 
p.  274— Hurd  R.  S.  1917,  Ch.  24,  Sees.  402n-402z 


Title 

An  Act  to  amend  sections  3,  4,  5,  6,  7,  and  9  of  an  "Act  to  provide  for 
*  *  *  a  Police  Pension  Fund  in  cities  having  a  population  exceeding  200,000 
inhabitants,"  approved  June  29,  1915,  in  force  July  1,  1915. 

Beneficiaries 

Policemen  in  the  service  of  cities  of  more  than  200,000  inhabitants,  and  the 
wives,  widows,  and  children  of  such  policemen.  (Sees.  3,  4,  and  5.) 

The  word  "policeman"  includes  any  person  (member  of  the  police  depart- 
ment) appointed  and  sworn,  or  designated  by  law  as  a  policeman,  and  who  is 
serving  or  has  served  as  a  policeman,  police  patrol  driver,  police  operator,  police 
dog  catcher,  or  police  kennelman.  (Sec.  7.) 

Participation  is  compulsory. 

NOTE:    In   1916  dog  catchers  and  kennelmen  were  not  included  as  policemen. 

Management 

Same  as  in  1916.     (I.  P.  L.  C.  Report  1916,  p.  242.) 
Revenue  from  Employes 

Two  and  one-half  per  cent  of  salary  deducted  monthly.     (Sec.  9.) 
FIVQ  per  cent  of  final  salary  from  date  of  retirement  until  attainment  of  age 
of  50  years  from  policemen  who  retire  before  attaining  that  age.     (Sec.  3.) 

NOTE:  In  1916  2%  of  salary  was  deducted  during  active  service.  Provision  for 
5%  not  in  effect. 

Revenue  from  Other  Sources 

A  tax  not  in  excess  of  9/10  of  a  mill  on  each  dollar  of  taxable  property  in 
such  city.  (Sec.  9.) 

In  the  event  of  failure  to  levy  such  tax,  a  sum  sufficient  for  the  require- 
ments of  this  fund  shall  be  appropriated  from  moneys  collected  for  licenses 
issued  for  any  business  or  profession  except  public  utilities.  (Sec.  9.)  If  neces- 
sary, tax  anticipation  warrants  may  be  issued  against  the  tax  of  any  current 
years.  (Sec.  9.)  All  property  and  assets  of  the  Police  Pension  Fund  super- 
seded by  this  one.  (Sec.  9.) 

NOTE:  Rewards,  gifts,  etc.,  fines  imposed  upon  policemen  for  violation  of  rules, 
and  receipts  for  special  details  are  also  included  as  revenue  for  this 
fund  under  Section  10  of  the  original  pension  Act.  In  1916  the  tax  levy 
was  limited  to  7/10  of  a  mill  for  a  period  of  three  years  beginning  in  1915. 

Limitations  of  Payments  by  Employes 

Deductions  from  date  of  entrance  into  service  until  date  of  retirement  on 
pension  or  death.     In  case  of  retirement  after  20  years  of  service  while  less 
than  50  years  of  age,  for  cause  other  than  disability,  the  policemen  so  retiring 
must  contribute  until  attainment  of  that  age.     (Sec.  3.) 
NOTE:    In  1916  the  latter  provision  was  not  in  effect. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  353 

Refunds 

No  provision. 
Conditions  for  Pensions  to  Employes 

For  Service  Pension:  Minimum  term  of  service  20  years  and  attainment 
of  50  or  more  years  of  age.  (Sec.  3.) 

Application  for  pension  must  be  filed  within  one  year  from  date  of  retire- 
ment. (Sec.  6.) 

For  Disability  Pension :  At  any  time  if  physically  disabled  while  in,  and  in 
consequence  of,  the  performance  of  police  duty.  (Sec.  4.) 

Certificate  of  disability  sworn  to  by  the  applicant,  the  commanding  officer 
of  the  department,  and  two  practicing  physicians  of  such  city  is  required. 
(Sec.  4.) 

Disability  pensioners  must  submit  to  physical  examinations  upon  order  of 
the  Board  of  Trustees.  (Sec.  4.) 

NOTE:    In   1916  service  pensions  were  granted  after  20  years  of  service  without 
regard  to  age. 

The  clause  limiting  time  for  filing  applications  for  pensions  was  not   in 
the  law. 

Amount  of  Pension  to  Employes 

For  service  pension,  amount  equal  to  one-half  salary  of  rank  held  for  one 
year  prior  to  retirement,  and  for  disability  pension,  amount  equal  to  one-half 
salary  of  rank  held  at  time  disability  occurs;  provided,  the  minimum  shall  not 
be  less  than  $600  per  year  and  other  annual  pensions  shall  not  be  in  excess  of 
$1300  for  the  General  Superintendent  of  Police,  $1150  for  the  First  Deputy 
Superintendent  of  Police,  $1100  for  Captains,  $1000  for  Lieutenants,  and  $900  for 
all  other  Policemen.  (Sec.  3.) 

Policemen  retired  before  July  1,  1917,  with  rank  of  Captain  or  rank  superior 
thereto,  shall  receive  pensions  of  $1000  a  year.  (Sec.  3.) 

NOTE:    In   1916  pensions  were   one-half  salary  but  not  less  than  $600  nor  more 
than   $900  a  year. 

Pensions  Reduced  by  Workmen's  Compensation 

If  any  policeman  receives  any  moneys  under  the  "Workmen's  Compensation 
Act,"  his  pension  shall  be  reduced  by  amounts  equal  to  the  sum  or  sums  so 
received.  (Sec.  6.) 

NOTE:    Not  in  law  in  1916. 

Provisions  for  Discontinuance  of  Employes'  Pensions 

Same  as  in  1916—1.  P.  L.  C.  Report,  1916,  p.  244. 
Conditions  for  Pensions  to  Dependents 

If  any  policeman  dies  from  any  cause  while  in  active  service  or  after 
retirement,  pensions  shall  be  paid  to  the  widow  and  natural  children  under 
18  years  of  age  of  such  policeman.  (Sees.  3,  4,  and  5.);  provided,  that  the 
widow  of  a  service  pensioner  must  have  married  the  deceased  husband  more 
than  one  year  prior  to  his  retirement  upon  pension,  (Sec.  3),  and  the  widow 
of  a  policeman  who  dies  of  causes  other  than  performance  of  duty  must  have 
married  such  policeman  more  than  two  months  prior  to  his  death  to  be  eligible 
for  pension.  (Sec.  5.) 

If  any  policeman  in  active  service  shall  be  legally  adjudged  insane,  pen- 
sions shall  be  paid  to  his  wife, — married  more  than  two  months  before  he  was 
adjudged  insane — and  natural  children  under  the  age  of  18  years.  (Sec.  5.) 


354  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Certificates  of  attendance  at  school  from  the  person  in  charge  of  such 
school  shall  be  filed  with  the  Clerk  of  the  Board  of  Trustees  at  least  once  each 
six  months  concerning  children  over  14  years  of  age.  (Sec.  6.) 

Application  for  pension  must  be  filed  within  one  year  from  date  of  death  of 
policeman.  (Sec.  6.) 

NOTE:  In  1916:  Pensions  were  paid  to  widows  of  service  pensioners  who  mar- 
ried such  pensioner  six  months  before  retirement ;  to  widows  or  children 
of  policemen  who  died  of  causes  other  than  performance  of  duty  only 
when  such  a  policeman  had  completed  ten  years  of  service,  and  to  the 
wife  of  a  policeman  who  became  insane  only  in  case  he  had  served 
ten  years.  Children  received  pensions  only  when  no  widow  or  wife  sur- 
vived and  until  16  years  of  age. 

There  was  no  limitation   of  the  time  during  which  applications   for  pen- 
sions should  be  made. 

Amounts  of  Pensions  to  Dependents 

Widows  of  policemen  retired  after  20  or  more  years  of  service,  $50.00  a 
month.  (Sec.  3,  B.) 

Widows  of  policemen  who  die  while  in  and  in  consequence  of  the  perform- 
ance of  duty,  $50.00  a  month.  (Sec.  5.) 

Widows  of  policemen  who  die  from  causes  other  than  performance  of  duty, 
—a  sum  monthly  equal  to  $2.50  for  each  year  of  deceased  husband's  service; 
maximum  $50.00.  (Sec.  5.) 

Wife  of  policeman  adjudged  insane, — a  sum  monthly  equal  to  $2.50  for  each 
year  of  husband's  service;  maximum  $50.00.  (Sec.  5.) 

Children,  if  widow  exists,  $10.00  a  month.     (Sees.  3  and  5.) 

Children,  if  no  widow  exists,  $15.00  a  month.     (Sees.  3  and  5.) 

When  widow  or  wife  exists,  the  pension  of  a  child  of  a  deceased  or  insane 
policeman  who  ceases  to  attend  school  after  attaining  an  age  of  14  years  shall 
be  reduced  $5.00  per  month.  (Sees.  3  and  5.) 

When  no  widow  survives,  the  pension  of  a  child  over  14  years  of  age  ceases 
when  such  child  does  not  attend  school.  (Sees.  3  and  5.) 

Pensions  to  all  who  were  pensioners  before  this  Act  came  into  effect  shall 
be  not  less  than  $600  a  year.  (Sec.  5.) 

NOTE:    In  1916:     Pension  equal  to  one-half  the  salary  of  the  deceased  policeman, 
(no  minimum  stated,  maximum  $900  a  year),   was  paid  to  the  family  of 
each  such  policeman  as  follows: 
1st — To  his  widow 

2nd — If  no  widow  survived  him,  the  pension  was  divided  equally 
among  his  children  under  16  years  of  age,  the  pensions  payable 
to  the  younger  children  increasing  as  the  older  ones  attained 
that  age.  The  same  practice  prevailed  as  to  wives  and  children 
of  insane  policemen. 

Dependents'  Pensions  Reduced  by  Workmen's  Compensation 

If  any  dependent  of  a  policeman  receives  any  moneys  under  the  "Work- 
men's Compensation  Act,"  the  pension  of  such  person  shall  be  reduced  by  an 
amount  equal  to  the  sum  or  sums  so  received.     (Sec.  6.) 
NOTE:    Not  in  law  in  1916. 

Provisions  for  Discontinuance  of  Dependents'  Pensions 

Widows'  pensions  terminate  upon  marriage.     (Sec.  6.) 
Children's  pensions  shall  not  be  paid  to  those  over  14  years  old  unless  cer- 
tificates of  attendance  at  school  are  filed  once  in  each  six  months.     (Sec.  6.) 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


355 


If  any  pensioner  is  convicted  of  a  felony,  or  becomes  an  habitual  drunkard, 
or  a  non-resident  of  the  United  States,  the  pension  of  such  person  terminates. 
(Sec.  6.) 

Pensions  granted  on,  account  of  insanity  terminate  if  the  insane  policeman 
leaves  or  is  taken  outside  of  Illinois.  (Sec.  5.) 

NOTE:    In   1916  attendance  at  school  was  not  required. 

Reserve  Fund  and  Other  Amounts  Necessary 

The  State  Superintendent  of  Insurance  shall  determine  and  report  to  the 
Board  of  Trustees  on  or  before  November  1,  of  each  year  the  amounts  neces- 
sary: 

1.  To  pay  pensions  granted  under  the  Act  superseded  by  this  one. 

2.  To  pay  pensions  to  policemen,  members  of  the  force,  before  January  1, 
1916,  and  their  dependents. 

3.  To  establish  and  maintain  a  "reserve  fund"   for  payment  of  pensions 
to  policemen  who  became  or  may  become  members  of  the  force  after 
January  1,  1916,  and  their  dependents.     (Sec.  9.) 

NOTE:    Not  in  law  in  1916. 

Investments 

Same  as  in  1916—1.  P.  L.  C.  Report,  1916,  p.  247. 
Reports  Concerning  Fund 

The  Board  of  Trustees  shall  certify  to  the  City  Council  on  or  before  Decem- 
ber 1  of  each  year,  the  assets  in  their  custody,  an  estimate  of  receipts  during 
the  ensuing  calendar  year  and  the  amount  required  during  that  year  for  pay- 
ment of  pensions  and  maintenance  of  the  reserve  fund.  (Sec.  9.)  The  Board 
of  Trustees  shall  also  report  such  matter  as  he  shall  prescribe  to  the  State 
Superintendent  of  Insurance  at  least  once  each  year,  and  the  said  Superintendent 
of  Insurance  shall  report  concerning  same  to  the  Governor  at  least  once  each 
year.  (Sec.  9.) 

All  Other  Provisions 

Same  as  in  1916—1.  P.  L.  C.  Report,  1916,  pp.  242-247. 


356  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


POLICEMEN'S  PENSION  FUND— CITIES,  VILLAGES,  AND 
TOWNS  OF  100,000  TO  200,000  INHABITANTS 


Act  Approved  April  29,  1887,  in  Force  July  1,  1887,  as  Subsequently 
Amended— Kurd  R.  S.  Ch.  24,  Sees.  391-402 


Title 

"An  Act  to  provide  for  the  setting  apart,  formation,  and  disbursement  of  a 
police  pension  fund  in  cities,  villages,  and  incorporated  towns." 

Beneficiaries 

Policemen  employed  by  cities,  villages,  and  towns  of  more  than  100,000  and 
not  more  than  200,000  inhabitants,  and  the  wives,  widows,  and  children  of  such 
policemen. 

NOTE:  Section  1  of  this  Act  provides  that  it  shall  apply  to  cities,  villages,  and 
towns  of  50,000  or  more  inhabitants,  but  a  subsequent  Act  approved 
June  29,  1915,  in  force  July  1,  1915,  applies  to  cities  of  more  than  200,000 
inhabitants,  and  another  approved  June  14,  1909,  in  force  July  1,  1909,  as 
amended  by  an  Act  filed  June  26,  1917,  in  force  July  1,  1917,  applies  to 
all  cities,  villages,  and  incorporated  towns  of  not  less  than  5000  and  not 
more  than  100,000  inhabitants,  thus  restricting  the  operation  of  this  Act 
to  cities,  villages,  and  towns  of  the  sizes  stated.  There  are  no  cities  of 
such  sizes  in  this  state  at  present. 

All  Other  Provisions  of  This  Act 

See  Illinois  Pension  Laws  Commission  Report,  1916,  pp.  242-247. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  357 


POLICEMEN'S  PENSION  FUND—CITIES,  VILLAGES,  AND 
TOWNS  OF  5000  TO  100,000 


Act  Filed  June  26,  1917,  in  Force  July  1,  1917— Laws  of  111.  1917, 
p.  282-— Hurd  R.  S.  Ch.  24,  Sees.  402a-402m. 


Title 

"An  Act  to  amend  an  Act  to  provide  for  the  setting  apart,  formation  and 
disbursement  of  a  Police  Pension  Fund  in  cities,  villages,  and  incorporated 
towns  *  *  *  of  not  less  than  9000  and  not  more  than  50,000  inhabitants  *  *  * 
approved  June  14,  1909,  in  force  July  1,  1909,  as  subsequently  amended,  by 
amending  the  title  and  section  one  thereof." 

Amendment  of  Title 

Title  amended  so  that  this  Act  now  applies  to  all  cities,  villages,  and  incor- 
porated towns  of  not  less  than  5000  and  not  more  than  100,000  inhabitants. 
(Sec.  2.) 

Beneficiarie? 

Members  of  regularly  constituted  police  forces  in  cities,  villages,  and  incor- 
porated towns  of  not  less  than  5000  and  not  more  than   100,000  inhabitants, 
and  the  \vidows,  children,  and  dependent  parents  of  such  members. 
Participation  is  compulsory. 

NOTE:  In  1916,  in  cities,  villages,  or  towns  of  not  less  than  50,000  nor  more 
than  100,000  inhabitants,  the  wife,  or  if  no  wife  existed,  the  children  of 
any  policeman  who  became  insane  after  10  years  of  service,  were  entitled 
to  pension.  The  dependent  parents  of  policemen  in  such  cities  were  not 
entitled  to  pensions. 

Management 

Board  of  three  trustees :  Two  residents  of  city,  village  or  town,  appointed 
by  the  mayor  for  terms  of  2  years.  (Terms  alternate.)  One,  either  of  active 
force  or  a  pensioner,  elected  by  members  of  active  force  and  pensioners  for  a 
term  of  1  year.  (Sec.  2.) 

Treasurer  of  city,  village  or  town  is  custodian  of  fund.     (Sec.  11.) 

NOTE:  Present  management  is  as  in  1916  in  cities,  villages  or  towns  of  not  more 
than  50,000  inhabitants. 

In  1916  in  cities,  villages  or  towns  of  50,000  to  100,000  inhabitants,  the 
Boards  of  Trustees  were  composed  of  five  members,  3  appointed  by  the 
mayor,  an  active  policeman,  and  a  pensioner.  (I.  P.  L.  C.  Report  1916, 
p.  242.) 

Revenue  from  Employes 

One  per  cent  of  salary  (not  to  exceed  $1.00  per  month)  only  in  cities,  vil- 
lages, or  towns  which  have  adopted  civil  service  in  the  police  department.     In 
other  cities,  villages,  or  towns  no  deductions  from  salaries.     (Sec.  1.) 
One  per  cent  of  pensions.     (Sec.   1.) 

NOTE:  In  1916:  Same  as  above  in  cities,  villages  or  towns  of  9000  to  50,000 
inhabitants.  One  and  one-half  per  cent  of  salaries  not  to  exceed  $3.00 
per  month  and  no  deductions  from  pensions  in  cities,  villages  or  towns 
with  from  50,000  to  100,000  inhabitants. 


358  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

Revenue  from  Other  Sources 

1.  A  tax  of  3/10  of  a  mill  on  each  dollar  of  taxable  property  in  such  city, 
village  or  town  to  be  levied  for  a  period  of  three  years  beginning  in  1918.     (Sec. 
1.)     (Note— Not  in  law  in  effect  in  1916.) 

2.  Three-fourths  of  all  moneys  received  for  dog  licenses.     (Sec.  1  )     (Note 
—In  1916;  same  as  now  in  cities  of  50,000  to  100,000.    Not  in  effect  in  cities  of 
less  than  50,000.) 

3.  Two  per  cent  of  all  moneys  received  for  saloon  and  wholesale  liquor 
licenses.     (Sec.  1.)      (Note— In  1916,  4%  in  cities  of  50,000  to  100,000,  10%  in 
cities  of  less  than  50,000.) 

4.  Ten  per  cent  of  all   revenues  collected   for  licenses  not  hereinbefore 
mentioned.     (Sec.  1.)      (Note— In  1916,  3%,  not  to  exceed  $50,000  a  year,  in 
cities  of  50,000  to  100,000;  same  as  now  in  cities  of  less  than  50,000.) 

5.  Ten  per  cent  of  all  fines  collected  for  violation  of  city  ordinances.     (Sec. 
1.)     (Note— In  1916,  50%  of  costs  in  cities  of  50,000  to  100,000;  same  as  now 
in  cities  of  less  than  50,000.) 

6.  All  moneys   received    for  special   details  of  police  officers.      (Sec.    1.) 
(Note — In  1916,  same  as  now  in  all  cities.) 

7.  All  moneys  received  from  fines  imposed  upon  members  for  violation  of 
rules  of  the  department.     (Sec.  1.)     (Note — In  1916,  same  as  now  in  all  cities.) 

8.  All  rewards  given  or  paid  to  members,  except  such  as  the  Board  of 
Trustees  shall  permit  members  to  retain.    This  does  not  apply  to  cities,  villages 
or  towns  which  have  not  adopted  civil  service  in  the  police  department.     (Sec. 
1.)      (Note — In  1916,  no  exception  if  department  is  not  under  civil  service  in 
cities  of  50,000  to  100,000 ;  same  as  now  in  cities  of  less  than  50,000.) 

9.  All  moneys  accumulated  under  previous  legislation   for  a  policemen's 
pension  fund,  and  one-half  of  all  moneys  accumulated  for  a  policemen's  and 
firemen's  pension  fund.     (Sec.  1.)      (Note — In  1916,  not  in  effect  in  cities  of 
50,000  to  100,000;  same  as  now  in  those  of  less  than  50,000.) 

Amounts  of  Pensions  to  Employes  and  Dependents 

NOTE:  In  1916  the  maximum  pension  provided  for  in  cities,  villages,  and  towns 
of  more  than  9000  and  not  more  than  50,000  inhabitants  under  the  law 
then  in  effect,  was  $600  a  year.  This  provision  was  not  changed  and 
under  this  Act,  that  maximum  now  applies  to  all  cities  of  not  less  than 
5000  nor  more  than  100,000  inhabitants.  Error:  The  above  mentioned 
maximum  was  erroneously  stated  to  be  $900  in  I.  P.  L.  C.  Report  of 
1916. 

In  1916  the  pensions  for  policemen  (their  wives,  widows  or  children)  in 
cities,  villages  or  towns  of  from  50,000  to  100,000  inhabitants  were  not 
less  than  $600  nor  more  than  $900  a  year.  (I.  P.  L.  C.  Report  1916, 
pp.  244-245-246.) 

Limitation  of  Annual  Income  of  Fund 

A  sum  in  excess  of  $2500.00  shall  not  be  collected  for  the  fund  in  any  year, 
and  if  the  revenue  available  exceeds  that  figure,  the  amount  to  be  appropriated 
from  saloon  license  money  shall  be  reduced.  (Sec.  1.) 

NOTE:  In  1916  there  was  no  such  limitation  upon  revenue  for  the  funds  in  cities, 
villages  or  towns  of  not  less  than  50,000  nor  more  than  100,000  inhab- 
itants. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


359 


All  Other  Provisions 

Same  as  in  Report  of  Illinois  Pension  Laws  Commission  of  1916  concerning 
"Act  approved  June  14,  1909,  in  force  July  1,  1909,  as  subsequently  amended," 
which,  in  1916,  applied  to  policemen  in  cities  of  not  less  than  9000  nor  more 
than  50,000  inhabitants.  (I.  P.  L.  C.  Report  1916,  pp.  242-247.) 


360  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


PARK  POLICE  PENSION  FUND 


Act  Filed  May  19,  1917,  in  Force  July  1,  1917— Laws  of  111.  1917, 
p.  612— Kurd  R.  S.  Ch.  105,  Sees.  337-347 


Title 

"An  Act  to  provide  for  the  setting  apart,  formation,  administration,  and 
disbursement  of  a  park  police  pension  fund." 

Beneficiaries 

Policemen  employed  by  Boards  of  Park  Commissioners  for  any  one  or 
more  towns  of  the  State  which  exist  under  and  in  pursuance  of  any  Act  or  Acts 
of  the  General  Assembly,  and  the  wives,  widows,  and  children  of  such  police- 
men. (Sees.  1,  3,  4,  and  5.) 

All  persons  entitled  to  benefits  from  pension  funds  existing  at  the  date  this 
Act  became  effective,  under  the  park  police  pension  fund  Act  approved  May 
23,  1913,  in  force  July  1,  1913,  become  beneficiaries  of  this  fund.  (Sec.  11.) 

Participation  is  compulsory. 

Management 

Board  of  five  trustees,  all  of  whom  must  be  residents  of  the  town  or  towns 
comprising  park  district:  Three  appointed  by  the  president  of  the  board  of 
park  commissioners  for  terms  of  3  years  (one  appointed  each  year).  One 
of  the  active  force  elected  by  the  active  force,  and  one  retired  policeman  elected 
by  retired  policemen,  widows  of  deceased  pensioners  and  guardians  of  children  of 
deceased  pensioners  who  are  pensioners,  each  for  a  term  of  1  year.  (Sec.  2.) 

The  board  of  trustees  elects  one  of  its  members  as  secretary  and  treasurer, 
who  is  custodian  of  fund.  (Sec.  7.) 

Expense  of  administration  to  be  borne  by  the  fund.     (Sec.  9.) 
Revenue  from  Employes 

Two  and  one-half  per  cent  of  salary  deducted  monthly.     (Sec.  8.) 

Five  per  cent  of  salary  from  date  of  retirement  until  attainment  of  age  of 
50  years  from  officers  who  retire  before  they  reach  that  age.  (Sec.  3.) 

NOTE:    In    1916    1H%   of   salary    not   to    exceed   $3.00    a   month.      Five    per   cent 
clause  was  not  in  effect. 

Revenue  from  Other  Sources 

A  tax  upon  all  taxable  property  in  such  park  districts  sufficient,  when  added 
to  revenue  from  all  other  sources,  for  the  annual  requirements  of  this  Act. 

The  amount  of  such  tax  to  be  levied  annually  upon  each  dollar  of  taxable 
property  in  their  respective  districts  by  the  following  named  park  boards  shall 
not  exceed :  South  Park  ^  of  a  mill,  West  Park  1/10  of  a  mill,  Lincoln  Park 
1/17  of  a  mill.  (Sec.  8.) 

Should  any  board  of  park  commissioners  be  without  authority  to  levy 
taxes,  the  corporate  authorities  of  any  such  town  (meaning  supervisor,  clerk 
or  assessor  thereof)  shall  levy  the  tax  required.  (Sec.  8.) 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  361 

All  assets  of  the  Pension  Fund  operating  under  the  Act  of  May  23,  1913. 
(Sec.  8.) 

All  rewards,  gifts,  etc.,  given  or  paid  to  any  members  of  the  force  except 
such  as  they  may  be  permitted  to  retain  or  are  in  form  of  competitive  award. 
(Sec.  9.) 

Gifts,  grants,  bequests,  etc.,  to  the  Board  of  Trustees  for  the  fund.     (Sec.  9.) 

NOTE:  In  1916  there  was  no  tax  levy.  Fines  and  penalties  assessed  against 
persons  arrested  by  park  police  were  given  to  this  fund;  also  fines  imposed 
upon  policemen  for  violations  of  rules  of  the  departments. 

Limitations  of  Payments  by  Employes 

Deductions  from  salaries  from  date  of  entrance  into  service  to  date  of 
pension  or  death.  (Sec.  8.) 

In  case  a  policeman  retires  after  20  years  of  service  while  less  than  50 
years  of  age  for  cause  other  than  disability,  he  must  contribute  until  attainment 
of  that  age.  (Sec.  3.) 

NOTE:    Latter  provision  was  not  in  effect  in  1916. 

Refunds 

No  provision. 
Conditions  for  Pensions  to  Employes 

For  Service  Pension:  Service  of  20  years  and  attainment  of  50  or  more 
years  of  age.  (Sec.  3.) 

For  Disability  Pension:  At  any  time  if  physically  disabled  while  in,  and 
in  consequence  of,  the  performance  of  duty.  (Sec.  4.) 

Certificate  of  disability  sworn  to  by  the  applicant,  the  commanding  officer 
of  department,  and  two  practicing  physicians  of  a  town  comprised  within 
the  park  district  required.  (Sec.  4.) 

Disability  pensioners  must  submit  to  physical  examinations  upon  order  of 
the  Board  of  Trustees.. 

Applications  for  pensions  must  be  filed  within  one  year  from  date  of  retire- 
ment or  death.  (Sec.  6.) 

NOTE:  In  1916  service  pensions  were  granted  without  regard  to  age.  Time 
within  which  applications  for  pensions  should  be  made  was  not  limited. 

Amount  of  Pension  to  Employes 

For  service  pension,  amount  equal  to  one-half  of  salary  of  rank  held  for 
one  year  prior  to  retirement,  and  for  disability  pension,  amount  equal  to  one- 
half  of  salary  of  rank  held  at  time  disability  occurs,  neither  to  be  less  than 
$600  nor  in  excess  of  $1100  a  year.  (Sees.  3  and  4.) 

NOTE:    Maximum  was  $900  a  year  in   1916. 

Pensions  Reduced  by  Workmen's  Compensation 

If  any  policeman  receives  any  money  under  the  "Workmen's  Compensation 
Act,"  his  pension  shall  be  reduced  by  an  amount  equal  to  the  sum  or  sums  so 
received.  (Sec.  6.) 

NOTE:    Not  in  law  in  1916. 

Provisions  for  Discontinuance  of  Employes'  Pensions 

When  disability  ceases,  pension  terminates  and  policeman  is  restored  to 
active  service  with  rank  formerly  held.  (Sec.  4.)  Failure  to  submit  to  physical 
examinations  or  disobedience  of  orders  of  the  Board  of  Trustees  respecting 


362  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

such  examinations,   conviction   of   felony,   becoming  an  habitual   drunkard,   or 
becoming  a  non-resident  of  the  United  States.     (Sec.  6.) 

Conditions  for  Pensions  to  Dependents 

If  a  policeman  dies  from  any  cause  while  in  active  service  or  after  retire- 
ment, or  if  a  policeman  is  adjudged  to  be  insane,  pensions  shall  be  paid  to  the 
wife  or  widow,  and  to  the  natural  children  under  18  years  of  age  of  such 
policeman,  (Sees.  3,  4,  and  5)  ;  provided,  that  the  widow  of  a  policeman  retired 
on  account  of  age  and  service,  must  have  married  him  at  least  one  year  before 
he  became  a  pensioner,  (Sec.  3),  and  the  widow  of  a  policeman  who  died  from 
causes  other  than  performance  of  duty,  or  the  wife  of  a  policeman  adjudged 
insane,  must  have  married  such  policeman  more  than  two  months  prior  to  the 
date  of  such  death  or  judgment  of  insanity.  (Sec.  5.) 

Application  for  pension  must  be  filed  within  one  year  from  date  of  death. 
(Sec.  6.) 

NOTE:  In  1916,  widow  who  married  a  policeman  retired  on  service  pension,  or 
a  policeman  who  died  after  10  years  of  service,  or  wife  who  married  a 
policeman  who  became  insane  after  10  years  of  service,  if  such  widow  or 
wife  married  such  policeman  before  the  date  of  retirement,  death,  or 
judgment  of  insanity.  Children  under  16  years  of  age  of  any  such  police- 
man if  no  widow  or  wife  existed  or  if  any  such  widow  married.  If  no 
widow  or  children  under  16  years  of  age  survived,  father  or  mother 
received  pension. 

Amounts  of  Pensions  to  Dependents 

Widows  of  policemen  retired  after  20  or  more  years  of  service — $50.00  per 
month.  (Sec.  3,  b.) 

Widows  of  policemen  whose  deaths  are  the  result  of  performance  of  duty 
—$50.00  per  month.  (Sec.  4.) 

Widows  of  policemen  whose  deaths  are  the  result  of  causes  other  than 
performance  of  duty,  and  wives  of  officers  adjudged  insane — A  sum  monthly 
equal  to  $2.50  for  each  year  of  deceased  husband's  service,  maximum  not  to 
exceed  $40.00.  (Sec.  5.) 

Children,  if  widow  exists— $10.00  a  month.     (Sec.  3.) 

Children,  if  no  widow  exists— $15.00  a  month.     (Sec.  3.) 

When  widow  or  wife  exists,  the  pension  of  a  child  over  14  years  of  age, 
who  ceases  to  attend  school,  is  decreased  $5.00  per  month. 

When  widow  or  wife  does  not  exist,  the  pension  of  a  child  over  14  years 
of  age,  who  does  not  attend  school,  ceases.  (Sec.  3.) 

Pensions  granted  under  the  Act  of  May  23,  1913,  shall  not  be  affected  or 
changed.  (Sec.  11.) 

NOTE:  In  1916,  if  widow  or  wife  existed,  she  received  pension  of  one-half  salary 
of  deceased  husband.  If  no  widow  or  wife  existed,  one-half  salary  of 
deceased  or  insane  father  divided  equally  between  all  children  under  16 
years  of  age  in  each  family.  Benefits  for  wives,  widows  and  children 
were  not  separated. 

Dependents'  Pensions  Reduced  by  Workmen's  Compensation 

If  any  dependents  of  a  policeman  receive  any  money  under  the  "Workmen's 
Compensation  Act,"  their  pensions  shall  be  reduced  by  amounts  equal  to  the 
sum  or  sums  so  received.     (Sec.  6.) 
NOTE:    Not  in  law  in   1916. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  363 

Conditions  for  Discontinuance  of  Dependents'  Pensions 

Widows'  pensions  terminate  upon  marriage.     (Sec.  6.) 

Pension  granted  on  account  of  insanity  terminates  if  the  insane  policeman 
is  taken  out  of  this  state.  (Sec.  5.) 

Pensions  shall  not  be  paid  to  children  over  14  years  of  age,  unless  certificates 
of  attendance  at  school  from  the  persons  in  charge  of  such  schools  are  filed 
once  in  each  six  months.  (Sec.  6.) 

If  any  pensioner  is  convicted  of  felony,  becomes  an  habitual  drunkard  or 
non-resident  of  the  United  States,  the  pension  of  such  person  terminates. 
(Sec.  6.) 

NOTE:    In   1916  attendance  at  school  was  not  required. 

Reserve  Fund  and  Other  Amounts  Necessary 

The  State  Superintendent  of  Insurance  shall  determine  and  report  to  the 
Board  of  Trustees  on  or  before  November  1  of  each  year,  the  amounts  neces- 
sary: 

1.  To  pay  pensions  granted  under  the  Act  superseded  by  this  one. 

2.  To  pay  pensions  to  policemen,  members  of  the  force  before  January 
1,  1916,  and  their  dependents. 

3.  To  establish  and  maintain  a  "reserve   fund"   for  payment  of  pensions 
to  policemen  who  became  or  may  become  members  of  the  force  after 
January  1,  1916,  and  their  dependents.     (Sec.  8.) 

NOTE:    Not  in  law  in  1916. 

Investments 

Funds  may  be  invested  in  bonds  of  the  United  States,  the  State  of  Illinois, 
or  of  any  county,  township  or  municipal  .corporation  in  this  state.  (Sec.  9.) 

Reports  Concerning  Fund 

The  Board  of  Trustees  shall  certify  to  the  board  of  park  commissioners 
on  or  before  July  10th  of  each  year,  the  assets  in  their  custody,  estimates  of 
receipts  during  the  fiscal  year  from  July  1st  to  June  30th,  and  the  amount 
required  during  that  period  for  payment  of  pensions  and  maintenance  of  the 
reserve  fund.  (Sec.  8.) 

Board  of  Trustees  shall  also  report  to  the  State  Superintendent  of  Insur- 
ance at  least  once  each  year  such  matter  as  he  shall  prescribe,  and  the  said 
Superintendent  of  Insurance  shall  report  concerning  same  to  the  Governor  at 
least  once  each  year.  (Sec.  9.) 

NOTE:    Not  in  law  in  effect  in  1916. 

Pensions  Exempt  from  Seizure 

Pensions  are  exempt  from  attachment  or  garnishment,  and  from  seizure 
under  any  legal  process.  (Sec.  11.) 

Repeal  of  Act 

The  Act  approved  May  23,  1913,  in  force  July  1,  1913,  under  which  the 
pension  fund  superseded  by  that  created  by  virtue  of  this  Act  operated  is 
"expressly  repealed."  (Sec.  11.) 


364  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


MUNICIPAL  EMPLOYES'  PENSION  FUND— CHICAGO 


Act  Filed  June  8,  1917,  in  Force  July  1,  1917.     Laws  of  111.  1917, 
p.  268.     Kurd  R.  S.  Ch.  24,  Sees.  741-751. 


Title 

"An  Act  to  amend  sections  1,  2,  7,  8,  and  9  of  an  Act  to  provide  for  the 
formation  and  disbursement  of  a  pension  fund  in  cities,  villages,  and  incor- 
porated towns  having  a  population  exceeding  100,000  inhabitants  for  municipal 
employes  *  *  *  ,"  approved  May  31,  1911,  in  force  July  1,  1911,  as  subse- 
quently amended. 

Beneficiaries 

All  employes  appointed  under  the  Civil  Service  Act  of  March  20,  1895,  and 
those  appointed  prior  to  that  time,  except  probationers,  those  less  than  21  years 
of  age,  sixty  day  (temporary)  employes,  those  who  are  sixty  or  more  years 
of  age  and  have  not  prior  to  the  attainment  of  such  age  worked  for  the  city 
for  at  least  ten  years,  employes  who  'are  participants  in  some  other  municipal 
pension  fund,  and  laborers,  unless  such  laborers  elect  to  become  participants. 

Participation  compulsory  as  to  all  but  laborers,  voluntary  as  to  them. 
(Sec.  1.) 

Management 

Same  as  in  1916.     (I.  P.  L.  C.  Report  1916,  p.  254.) 
Revenue  from  Employes 

Two  dollars  and   fifty  cents  a  month  deducted   from  the   salary  of  each 
employe.    Like  sums  paid  in  by  employes  temporarily  absent  from  duty.    (Sec.  1.) 
NOTE:    In  1916,  $2.00  per  month  from  each  employe. 

Revenue  from  Other  Sources 

An  amount,  annually,  equal  to  twice  the  sum  deducted  from  salaries  of 
employes  and  that  paid  by  them  in  lieu  of  such  deductions  during  the  preceding 
fiscal  year;  such  sum  to  be  appropriated  from  funds  resulting  from  licenses 
issued  for  all  purposes  except  public  utilities.  (Sec.  1.) 

Instead  of  appropriating  license  moneys,  such  city  may  levy  a  tax — not  in 
excess  of  5/10  of  a  mill  upon  each  dollar  of  taxable  property  in  such  city — 
sufficient  to  produce  an  equal  amount.  (Sec.  1.) 

NOTE:    The  tax  levied  for  1918  is  about  3/10  of  a  mill. 

In  1916,  the  law  did  not  provide  for  a  tax  levy  and  the  sum  required 
from  licenses  was  equal  to  that  deducted  from  the  salaries  of  employes 
during  the  preceding  fiscal  year.  Gifts,  etc.,  may  be  accepted  for  this 
fund.  (Sec.  4  of  original  Act.) 

Limitations  of  Payments  by  Employes 

Deductions  from  salaries  from  date  of  entrance  into  service  to  date  of 
pension  or  death. 

An  employe  who  retires  on  account  of  age  and  service  before  having  con- 
tributed for  a  period  of  20  years,  must  pay  difference  between  the  sum  which 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  365 

would  have  been  contributed  in  that  time  and  the  actual  sum  contributed  plus 
interest  at  5%  from  date  of  retirement  within  4  years  from  such  date.  (Sec.  7.) 
If  any  employe  retires  after  20  or  more  years  of  service  before  attaining 
an  age  of  55  years,  such  employe  must  continue  to  contribute  until  he  becomes 
55  years  old.  If  such  an  employe  has  not  contributed  for  a  period  of  20  years, 
he  must,  in  addition  to  regular  contributions,  pay  the  amount  of  the  difference 
between  the  sum  which  represents  20  years  of  contribution  and  the  sum  actually 
contributed  before  the  date  of  his  retirement  plus  interest  at  5%  from  date  of 
retirement  within  one  year  from  that  date.  (Sec.  8.) 

NOTE:    In  1916,  the  period  for  payment  of  shortage  by  service  pensioner  was  3 

years,   and   that   for  payment   by   the   employe   who   retired   before   being 

55  years  of  age  was  30  days. 

Refunds 

Same  as  in  1916.    I.  P.  L.  C.  Report  1916,  p.  255. 
Conditions  for  Pensions  to  Employes 

For  Service  Pension :  Minimum  age  for  pension  55  years.  Minimum  term 
of  service  20  years.  (Sees.  7  and  8.)  Civil  War  veterans,  10  years,  if  65 
or  more  years  old.  (Sec.  9^.)  (Act  filed  June  11,  1917,  in  force  July  1,  1917. 
Laws  of  111.  1917,  p.  266.) 

For  Disability  Pension:  Minimum  term  of  service  5  years,  subsequent  to 
July  1,  1911.  Proof  of  disability  required  from  physicians  designated  by  Board 
of  Trustees  and  examination  of  disability  pensioners  must  be  made  at  least 
once  each  year.  (Sec.  9.) 

NOTE:    Annual  physical  examinations  not  required  in  1916. 

Amount  of  Pension 

For  Service  Pension :  Fifty  dollars  per  month,  subject  to  deductions  noted 
under  "Limitation  of  Payments  by  Employes."  (Sec.  4  original  Act.) 

For  Disability  Pension :  An  amount  equal  to  that  paid  to  a  service  pen- 
sioner whose  contributions  to  the  fund  equal  those  of  the  disabled  employe. 
(Sec.  9.) 

Pensions  Reduced  by  Workmen's   Compensation 

If  any  employe  receives  any  sum  or  sums  of  money  under  the  "Workmen's 
Compensation  Act,"  his  pension  shall  be  reduced  by  such  sum  or  sums.     (Sec.  9.) 
NOTE:    Not  in  effect  in  1916. 

Provisions  for  Discontinuance  of  Pension 

Pension  for  disability  terminates  when  the  disability  ceases.  Employe  is 
restored  to  the  service  as  soon  as  may  be  under  the  Civil  Service  Act  of  March 
20,  1895.  (Sec.  9.) 

NOTE:    In   1916,   the  law  did  not  provide  for  restoration  to  active  service. 

Reports  Concerning  the  Fund 

The  Board  of  Trustees  shall  report  at  least  once  each  year  to  the  State 
Superintendent  of  Insurance,  such  matters  concerning  the  fund  as  he  shall  pre- 
scribe, and  the  State  Superintendent  of  Insurance  shall  report  upon  such  matters 
to  the  Governor  at  least  once  each  year. 
NOTE:    Not  in  law  in  1916. 


366  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


Municipal  Employes'  Pension  Fund — Chicago.  Act  Filed  June  11, 
1917,  in  force  July  1,  1917.  Laws  of  111.  1917,  Page  266. 
Kurd  R.  S.  Ch.  24,  Sec.  749^ 


Title 

"An  Act  to  amend  section  9^  of  "An  Act,  etc." — The  Municipal  Pension 
Fund  Act — which  section  applies  to  veterans  of  the  Civil  War." 

Extends  Pension  to  Veterans  Heretofore  Excluded 

Any  employe  who  served  in  the  military  or  naval  departments  of  the  United 
States  during  1861,  2,  3,  4,  or  5,  who  is  65  years  of  age  and  has  served  such 
city  at  least  10  years  and  was  not  a  participant  in  this  fund,  could  become  such 
by  paying  a  sum  equal  to  that  which  he  would  have  contributed  during  his  period 
of  employment  since  July  1,  1911,  on  or  before  January  1,  1918,  or  the  date 
of  his  retirement  if  he  retired  before  that  time,  without  interest. 

NOTE :  This  allowed  about  eight  old  soldiers  who  were  barred  by  the  clause  re- 
quiring 10  years  of  service  before  attainment  of  60  years  of  age,  to 
become  beneficiaries. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  367 


HOUSE  OF  CORRECTION  EMPLOYES'  PENSION  FUND- 
CITIES  OF  MORE  THAN  150,000 


Act  Filed  June  26,  1917,  in  Force  July  1,  1917.     Laws  of  111.  p.  533— 
Hurd  R.  S.  1917,  Ch.  67,  Sees.  18-31 


Title 

"An  Act  to  amend  section  one  of  an  Act  entitled,  "An  Act  to  provide  for 
the  setting  apart,  formation,  and  disbursement  of  a  House  of  Correction  Em- 
ployes' Pension  Fund  in  cities  having  a  population  in  excess  of  150,000  inhabi- 
tants," approved  June  10,  1911,  in  force  July  1,  1911,  as  subsequently  amended. 

Revenue  from  Sources  Other  Than  Deductions  from  Salaries,  Gifts,  Etc. 
Three  per  cent  of  the  gross  earnings  of  the  House  of  Correction  and  3% 
of  the  fines  and  costs  collected  for  violations  of  city  ordinances  where  persons 
have  been  incarcerated  in  the  House  of  Correction  for  non-payment  of  such 
fines  and  costs.  Both  of  these  payments  shall  be  for  a  period  of  three  years 
beginning  in  1917.  (Sec.  1.) 

NOTE:  In  1916  the  law  provided  for  the  same  amount  of  revenue  from  these 
sources  during  1915,  1916,  and  1917  only.  This  Act  extended  the  period 
two  years. 

All  Other  Provisions 

Same  as  in  1916.     (I.  P.  L.  C.  Report  1916,  pp.  254-259.) 


368  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


ILLINOIS    STATE   TEACHERS'    PENSION   AND    RETIRE- 
MENT FUND 

ALSO 

TEACHERS'    PENSION    AND    RETIREMENT    FUNDS    IN 

SCHOOL  DISTRICTS  OF  NOT  LESS  THAN   10,000 

NOR  MORE  THAN  100,000  INHABITANTS 


Act  Filed  June  26,  1917,  in  Force  July  1,  1917.     Laws  of  111.  p.  719—- 
Kurd  R.  S.  Ch.  122,  Sees.  211 


Title 

"An  Act  to  amend  an  Act  entitled  'An  Act  to  Establish  and  Maintain  a 
System  of  Free  Schools/  approved  and  in  force  June  12,  1909,  as  subsequently 
amended,  by  amending  section  211  thereof." 

Revenue  from  Sources  Other  Than  Deductions  from  Salaries,  Gifts,  Etc. 
This  Act  amends  section  211  of  the  School  Act  by  providing  therein  for 
the  payment  of  money  from  the  common  school  fund  for  the  support  of  the 
"Illinois  State  Teachers'  Pension  and  Retirement  Fund"  and  "Public  School 
Teachers'  Pension  and  Retirement  Funds"  in  cities  and  school  districts  of  more 
than  10,000  and  not  in  excess  of  100,000  inhabitants.  (Sec.  1.) 

Revenue  from  the  Common  School  Fund  of  the  State 

To  the  Illinois  State  Teachers'  Pension  and  Retirement  Fund,  an  amount 
equal  to  1/10  of  a  mill  upon  each  dollar  o-f  the  assessed  valuation  of  all  taxable 
property  in  the  State  except  that  in  such  cities  and  school  districts  as  are  not 
included  under  the  terms  of  an  Act  entitled  "An  Act  in  relation  to  an  Illinois 
State  Teachers'  Pension  and  Retirement  Fund,"  approved  May  27,  1915,  in 
force  July  1,  1915.  (Sec.  211,  a.) 

To  the  Teachers'  Pension  and  Retirement  Funds  in  cities  and  school 
districts  of  not  less  than  10,000  and  not  more  than  100,000  inhabitants,  an  amount 
equal  to  1/10  of  a  mill  on  each  dollar  of  the  assessed  valuation  of  all  taxable 
property  in  such  cities  or  school  districts  where  such  pension  and  retirement 
funds  are  in  operation  pursuant  to  an  Act  entitled  "An  Act  to  enable  any  board 
of  school  inspectors  or  any  body  or  board  of  officials  which  governs  *  *  *  any 
school  district  *  *  *  of  not  fewer  than  10,000  and  not  more  than  100,000  inhab- 
itants *  *  *  to  establish  and  maintain  a  Teachers'  Pension  and  Retirement 
Fund,"  approved  June  27,  1913,  in  force  July  1,  1913.  (Sec.  211,  b.) 

NOTE:  This  amendment  does  not  affect  the  amount  or  source  of  income  of  the 
pension  funds  involved.  In  1916,  this  revenue  was  provided  for  under  the 
terms  of  the  pension  laws  herein  referred  to.  Amendments  to  those  Acts 
have  stricken  from  them  the  details  concerning  this  revenue. 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  369 


ILLINOIS    STATE   TEACHERS'   PENSION   AND    RETIRE- 
MENT FUND 


Act  Filed  June  26,  1917,  in  Force  July  1,  1917.     Laws  of  111.  1917, 
Page  747.     Kurd  R.  S.  1917,  Ch.  122,  Sections  580-615 


An  Amendment  Concerning  Revenue  from  the  Common  School  Fund 

Amends  section  23  of  the  Act  entitled  "An  Act  in  Relation  to  an  Illinois 
State  Teachers'  Pension  and  Retirement  Fund,"  approved  May  27,  1915,  in 
force  July  1,  1915,  by  striking  therefrom  the  provision  for  the  payment  of 
moneys  from  the  common  school  fund  for  the  support  of  this  fund. 

NOTE:  The  Act  which  amended  section  211  of  the  School  Act  provides  for  the 
payment  of  moneys  from  the  common  school  fund  for  the  support  of 
this  pension  fund  in  manner  and  amount  as  in  1916. 

TEACHERS'    PENSION    AND    RETIREMENT    FUND    IN 

SCHOOL  DISTRICTS  OF  10,000  TO  100,000 

(PEORIA  TEACHERS'  FUND) 


Act  Filed  June  26,  1917,  in  Force  July  1,  1917.     Laws  of  111.  1917, 
Page  746.     Kurd  R.  S.  1917,  Ch.  122,  Sees.  562-579 


An  Amendment  Concerning  Revenue  from  the  Common  School  Fund 

Amends  section  3  of  an  Act  entitled  "An  Act  to  enable  any  board  of  school 
inspectors  or  any  body  or  board  of  officials  which  governs  *  *  *  any  school 
district  *  *  *  of  not  fewer  than  10,000  and  not  more  than  100,000  *  *  *  to 
establish  and  maintain  a  Teachers'  Pension  and  Retirement  Fund,"  approved 
June  27,  1913,  in  force  July  1,  1913,  by  striking  therefrom  the  provision  for  the 
payment  of  moneys  from  the  common  school  funds  of  such  districts  for  the 
support  of  such  funds. 

NOTE:  The  Act  which  amended  section  211  of  the  School  Act  provides  for  the 
payment  of  money  from  the  common  school  fund  for  the  support  of  such 
pension  funds  in  manner  and  amount  as  in  1916. 

STATE  INSTITUTIONS  TEACHERS'  PENSION  AND 
RETIREMENT  FUND 


Act  Filed  June  4,  1917,  in  Force  July  1,  1917.     Laws  of  111.  1917, 

p.  748— Kurd  R.  S.  1917,  Ch.  122,  Sees.  616-637 
Title 


"An  Act  to  Create  and  Administer  a  State  Institutions  Teachers'  Pension 
and  Retirement  Fund." 
Beneficiaries 

Teachers  employed  in  any  state  educational,  correctional,  or  charitable  insti- 
tutions, except  the  University  of  Illinois,  supported  wholly  or  in  part  by  public 
moneys  of  this  State.  (Sec.  2.) 


370  ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 

The  term  "teacher"  includes  any  teacher,  teacher  clerk,  principal,  supervisor, 
supervising  principal,  president,  superintendent,  assistant  superintendent,  certified 
librarian,  or  assistant  librarian,  who  gives  at  least  half  time  to  distinctly  educa- 
tional work.  (Sec.  22.) 

Participation  optional  for  those  in  service  prior  to  July  1,  1917,  (Sec.  8)  ; 
compulsory  for  those  employed  on  and  after  that  date  (Sec.  9). 

Management 

Administered  by  the  Board  of  Trustees  of  the  Illinois  State  Teachers'  Pen- 
sion and  Retirement  Fund  as  provided  in  the  Act  approved  May  27,  1915.  (Sec. 
1.)  (I.  P.  L.  C.  Report  1916,  p.  260.) 

Expense  of  administration  to  be  paid  out  of  this  fund  shall  be  based  upon 
the  proportion  of  annuitants  under  this  fund  as  related  to  the  total  in  this  and 
the  Illinois  State  Teachers'  Pension  and  Retirement  Fund,  combined.  (Sec.  4.) 

The  Board  of  Trustees  must  report  annually  at  first  meeting  in  June.  A 
copy  of  such  report  shall  be  sent  to  the  Superintendent  of  Public  Instruction, 
who  shall  include  such  reports  in  his  biennial  reports  to  the  Governor.  (Sec.  5.) 

The  State  Treasurer  is  custodian  of  this  fund.     (Sees.  10  and  12.) 

Revenue  from  Employes 

First  10  years,  $1.00  per  month;  next  5  years,  $2.00  per  month;  next  10 
years,  $6.00  per  month;  for  first  five  months  of  teaching  after  July  1st  in  each 
year.  Total  deductions  or  contributions  not  to  exceed  $400.00. 

All  sums  previously  deducted  for  the  Illinois  State  Teachers'  Pension  and 
Retirement  Fund  to  be  credited  to  the  teacher  concerned.  (Sec.  7.) 

Revenue  from  Other  Sources 

Donations,  legacies,  etc.,  such  funds  as  the  General  Assembly  shall  from 
time  to  time  appropriate,  other  moneys  received  from  any  legal  source.  (Sec.  13.) 

Limitation  of  Payments  by  Employes 

Minimum :  a  sum  equal  to  the  annual  pension  to  which  a  teacher  is  entitled. 
Maximum:  $400.00.  The  total  amount  to  be  paid  is  based  upon  25  years  of 
service  and  contribution.  (Sec.  7.) 

Before  receiving  pension  on  account  of  age  and  service,  or  disability,  teacher 
must  have  paid  a  sum  not  less  than  $400.00  into  this  fund.  (Sec.  15,  a  and  b.) 

Teachers  satisfying  service  and  age  requirements  are  eligible  for  pension 
upon  payment  of  a  sum  equal  to  that  which  such  teacher  would  have  paid  had 
he  or  she  been  a  contributor  during  such  period  of  past  service  with  simple 
interest  at  4  per  cent  per  annum.  (Sec.  15,  a.) 

Refunds 

Fifty  per  cent  of  sum  paid,  without  interest,  if  contributor  ceases  to  teach 
before  completion  of  15  years  of  service.  (Sec.  17.) 

Conditions  for  Pensions 

For  Service  Pension:  Attainment  of  50  or  more  years  of  age  (Sec.  15,  a)  ; 
minimum  term  of  service  25  years,  at  least  15  of  which  shall  have  been  in  this 
state.  (Sec.  G,  15.) 

For  Disability  Pension:  Minimum  term  of  service  15  years,  of  which  not 
more  than  two-fifths  shall  have  been  outside  of  this  state.  (Sec.  15,  b.) 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919  37i 

One  year's  leave  of  absence  for  professional  preparation  is  allowed  as  ser- 
vice. (Sec.  19.) 

In  computing  terms  of  service,  a  year  shall  be  a  legal  school  year  at  the 
time  and  place  in  Illinois  where  service  was  performed.  Service  in  other  states 
shall  be  computed  according  to  the  period  which  constitutes  a  legal  school  year 
in  this  state.  (Sec.  15,  c.) 

Service  as  county  superintendent,  or  assistant  county  superintendent  of 
schools,  teacher  in  state  schools  or  institutions,  and  teacher  in  public  schools,  as 
denned  in  the  Illinois  State  Teachers'  Pension  and  Retirement  Fund  Act,  and 
ten  years  of  similar  teaching  service  in  other  states  of  the  United  States  may 
be  counted  as  part  of  the  25  years  of  service  required.  (Sec.  22.) 

Amount  of  Pension  Per  Year 

Sixteen  dollars  a  year  for  each  year  of  service;  total  not  to  exceed  $400.00 
a  year,  payable  quarterly.  (Sec.  16.) 

Provisions  for  Discontinuance  of  Pensions 

If  any  pensioner  re-enters  the  teaching  service  of  such  schools  or  institu- 
tions, payment  of  pension  shall  be  discontinued  during  the  performance  of  such 
service,  and  resumed  when  such  person  retires  again.  (Sec.  20.) 

Deductions  from  Salaries  and  Reports  Concerning  Same 

Proper  amounts  shall  be  deducted  from  salaries.  (Sec.  6.)  Such  deduc- 
tions shall  be  based  upon  terms  of  service  and  corresponding  classifications  made 
by  the  Board  of  Trustees.  (Sec.  7.) 

The  administrative  officers  who  make  such  deductions  shall  forward  them 
to  the  State  Treasurer  quarterly,  and  shall  transmit  annual  statements  regarding 
such  sums  to  the  State  Treasurer  on  or  before  July  7th  of  each  year.  (Sec.  10.) 
Investments 

Funds  may  be  invested  in  unencumbered  realty  situated  in  this  state,  worth 
at  least  50  per  cent  more  than  the  amount  loaned,  bonds  of  this  state,  the  Sani- 
tary District  of  Chicago,  counties,  townships,  and  cities  of  Illinois,  and  bonds 
issued  by  school  directors  for  improvement  of  school  property.  (Sec.  3.)  See 
Kurd  R.  S.  1917,  Ch.  122,  Sees.  72  and  195. 

Option  Regarding  Participation 

Persons  in  service  July  1,  1917,  may  come  under  the  provisions  of  this  Act 
at  any  time  before  September  1,  1920,  by  notifying  the  Board  of  Trustees  in 
writing.  (Sec.  9.) 

Sums  Refunded  to  Be  Returned 

If  a  teacher  who  receives  a  refund,  afterward  returns  to  teach  in  any 
school  or  institution  included  under  this  Act,  such  teacher  shall  pay  into  this 
fund,  within  three  years  from  date  of  such  return  a  sum  equal  to  the  amount 
withdrawn,  with  4  per  cent  simple  interest,  from  the  time  such  sum  was  with- 
drawn. (Sec.  17.) 

Pensions  Exempt  from  Seizure 

Pensions  cannot  be  pledged  or  assigned,  and  are  exempt  from  seizure  under 
execution  or  other  legal  process.  (Sec.  21.) 

NOTE:    There  is  no  provision  for  pensions  to  dependents. 


372 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


INDEX 


Abolition    of   office,    310 

Absence   from    disability,    151 

Acceptance   of  provisions  of   act,    158 

Accepting   other    relief,    316 

Accident,   (see  sickness  and  accident  insurance) 

Accounting  and    Recordkeeping 

Bookkeeping  systems  outlined  in  S.   P.,  22 
By  local  retirement  boards  under   S.    P.,  23, 

112 
For  individual  employes  under  S.   P.,   16,  28, 

112 

Recordkeeping  by   retirement   boards,    103 
Standardization  advocated  by  commission,   84 
System  to  be   prescribed  by  retirement  com- 
mission,   107 
Accounts,   individual,    16 
Accrued  liabilities,    39,   204 

Accumulations  for  annuity  purposes,  51,  60,  127 
Act  of   1877,  construction   of,    309 
Act  providing   for  creation   of   Illinois    Pension 

Laws  Commission,  1 
Acts   (see  special  index,  p.  239) 
Actuarial    reserve    systems    in    other    states,    re- 
cent, 23 
Actuarial 

Calculation  of  risks,   15 
Investigations  in   1916  report,   215 
Investigations  reported  to  Governor,  23 
Science  in  France,  213 
Science  in  Great  Britain,  210 
Science,  practical   application  of,    10 
Service   to   be    furnished   by    retirement   com- 
mission, 107 
Administration 

Efficiency  of,  under  S.  P.,  16 
Of   funds  by  boards,   22,   31 
To   be   unified,    standardized,    and    safeguard- 
ed,  22 

Age    (see   also  retirement),    defined,    95 
Ages  of  retirement,  standard  and  minimum,  49 
American   Mortality  Experience   Table,    51,   235 
Amount  of  pension,  324,  340 
Annual   reports    (see  reports) 
Annuitants,   McClintock's  Table  for,  38 
Annuities 

Amounts,   63,  64,    126,    129,   144 

As    percentage    of    salary    rather    than    flat 

amount,   34 
Basis  for,   33 
Children's,  30,   144 
Contributions   for,   73-74 
Cost  of,  71 
Disability,    235 

Old  age  retirement  (see  also  retirement) 
Accumulation  of  contributions,  28,  127 
Accumulation  of  funds  during  service,  17, 

32 
Affected  by   entrance   and   retirement  ages, 

49 

Aim   of  laws,   other   states,   204 
Amount  of,   17,  26,  35,   51,  126,  202 
Children's  benefits,   143 
Contributions   for,    18,    27,    28,    36,    39,    50, 

52,  73,   126,   127,  128,   149,   152 
Cost  of,   40 
Definition,    95 

Details  of  Standard  Plan  as  to,  126 
Different,    for    police    and    firemen    recom- 
mended in   S.   P.,   35 
Exempt  from  attachment  under  S.   P.,    161 


General  provisions  of  S.  P.,   157 
Leave  of  absence,  contributions  during,  152 
Limitation  of  contributions,   18,  28,  52,  127 
Maximum  salary  used  as  basis  for,  28 
Present  employes,   31,   32,  35,  73,   128,   134 
Percentage   basis   for,   in  contrast  to   "Flat 

Pension,"    34 

Period   of  contributions,   52 
Principal  features  of  S   P.,   9 
Ratio  of  contributions  for,  28,  36,   126 
Recommended  in   S.   P.,    15 
Refund  of  contributions,  28,  52,  154 
Reserve  basis,   33 
Tabulation   of, 

Accumulated  contributions   for  annuities, 

60 
Annuities,  at  minimum  age  of  retirement, 

64 
Annuities,  at  standard  age  of  retirement, 

63 
Annuities     when    withdrawing    after     10 

years   service,   61 

Contributions,  not  permitting  25  years 
service  before  standard  age  of  retire- 
ment, 58 

Contributions,  permitting  25  years  ser- 
vice before  standard  age  of  retirement, 

Cost  in  salary  percentages,  44 
Distributed    cost,    in    salary    percentages, 

44 

Salary  percentages  required,  41 
Transfer,  provisions  regarding,  157 
Withdrawal   privileges,   131-135 
On  withdrawal,   61,   131 
Temporary,   158 
Significance  of  requiring  payment  for  in  first 

25  years,   39 
Supplementary,    128 
Survivorship,  29,   38,  77,   87,   142 
Amounts  of,  under  S.   P.,  72,   77 
Contrasted  with  widows  annuities,  17 
Conversion  of  life  insurance  into,  29 
Cost  of,  under  S.  P.,  71 
Defined,  95 

Provision  for,  under  S.  P.,  9,  17,  88 
Variation  of,  49 
Widows,   50,    69,   77,    78,   140,    141,    160,   225, 

228 

Annuity,   defined,   95 
Annuity  equalization  fund,  124 
Annuity  reserve  fund  of  retirement  board,  116 
Application  of  general  constitutional  provisions, 

265 
Appointive   officials   and    employes 

Exempted    from   civil   service   laws,    172 

Number  of,  in  counties,  185 

Number  of,  in  state,  163 

Object  of  survey  concerning,  164 

Tabulation  of 

Officials  and  employes  downstate  cities,  188 
Officials  and  employes  by  counties,  186 
Positions  as  to  tenure  acts,  172 
Tendency  regarding  appointive  officials,    171 
Aspects,  larger,  of  pension  problem,  7 
Assets  of  prior   existing  pension   funds,   120 
Assignments,  etc.,  of  pensions,   161,  286,  291 
Assumed   annual   salary,   defined,   97 
Attachment  of   annuities,    etc.,    161 
Attitude    with    respect   to    employment    of    pen- 
sioner,  249 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


373 


Attorney    General, 

Counsel    assigned   by,    14 

Legal    advisor    for    retirement    boards    and 

commission,    109 
Australian  cases,   336 
Austro-Hungary,   212 

Banks,  pension   system   of,   239,  243 
Baptist  church  pensions,  248 
Basis   of   annuities,    insurance   and   other   bene- 
fits, 33,  35 

Basis    of    Commission's    work,    1916    investiga- 
tions, 5 

Beneficiaries,    304,    324,    340 
Beneficiary,    defined,   97 
Benefits 

Basis  for,  33 

For  children,   30 

Of    present    employes    to    equal    those    under 
superseded   acts,   32 

Scale  of,  under  Standard  Plan,  17,  47 

Sickness  and   accident,    146 

Under   prior   laws,   304 
Blascke,  noted  actuary,  213 
Board   of 

Education,    158 

Trustees,   state,   31 

Boards,  powers  and  duties,  103,  327,  336 
Borrowing  by  members  of  boards,  etc.,   161 
Boston,   208 
Burial   benefit,    351 

California,    201 
Carnegie   foundation,  247 

Cash     disbursement     basis     for     disability     pro- 
visions, 91 

Centralization   of  supervision,   21 
Central  state  supervising  board,  22,  84 
Certificate  of  qualification,   109 
Change   of   circumstances,    320 
Charges,  for  discharge  or  removal,   158,  315 
Chicago   funds,    181 

Firemen's    fund,    229-231 

Municipal   Employes'   fund,  231-234 

Police    fund,   226-229 

Teachers'   fund,    368-371 
Chicago  teachers'  salary  scale,  table,  56 
Child's  annuity,  defined,  95 
Children,   17,   30,   143,  225,  228,  230,   300 
Children's    annuity    fund    of    retirement    board, 

113 

Church  pension  systems,  239,  248 
Civil  service,   167,  218 

Classes  of  insurance  called   for  by  present  sit- 
uation,   14 

College   pension   systems,    239,    246 
Colorado,   201 
Commission 

Act    for    creation    of    Illinois    Pension    Laws 
Commission   of   1918,    1 

Deals  with  problem  in  broad  way,   14 

Findings  and  recommendations  of,  13-23,  221 

Meetings  and  public  hearings  of,   11 

Members  and  staff  of,  2 
Common  school  fund,  236 
Compensation 

Fund  of  retirement  board,   114 

Pensions   part   of  employe's,    79 
Comprehensiveness    lacking  in   present   laws,   6, 

80 

Compulsory    retirement,    323,    334 
Conditions  defeating  pension,   313-323 
Conditions  for  pensions,   340 
Conditions    preliminary   to   the   right   to    a   pen- 
sion,   304-313 

Congregational    church,    proposed    pension    sys- 
tem,  249 
Connecticut,  201 

Connection  between  injury  and  death,   306 
Consolidation  of  funds,  21,  83,    182,    183 
Consolidation  of  hazards,  82 


Constitutional  provisions,  265 
Construction  of  pension  acts,  298,  304 
Constructive     recommendations     and     findings, 

memorandum,    13-23 
Continuance  of  disability,  305 
Continuity  of  service,   169,   308 
Contractual  rights,  243,  249,  281-298 
Contributions,    by  employe 
For  annuities 

Accumulation,    9,    127 

Compulsory,    10,    18,    212 

Credited  to  individual  accounts,  16,  24 

Deduction   from  salary,    18 

France,   213 

Germany,  212 

Great  Britain,  210 

Insufficient,  27 

Leave  of  absence,  152 

Legislation   of    1917    increased,   224 

Limitations,  28,   39,   52,   127 

Massachusetts  provisions,   202 

Maximum  salary  as  basis,  28 

Period,   53 

Present  employes,  20,   32,   74,   128 

Ratio,    18,  28,  36,   126 

Refunds,  19,  28,  52,   154 

Requirement  fair,    18 

Tabulations  of 

Accumulations,  60,   61 
Contributions,     permitting    and    not    per- 
mitting 25  years  service,  56-59 
Cost  of  annuities  as  percentage  of  salary, 

Percentages   of   salary   to   provide   annui- 
ties, 41 
Salary     scales     illustrating     contributions 

required,   54 

To  be  made  during  first  25   years,  39 
Under  Standard  Plan,  18,  42 
For  life   insurance 

Calculation,  at  other  ages  than  55  and  60, 

66 

Limitations,  29,  39,  52,   138 
Method  of  payment,  29,  50 
Period,    52 
Ratio,   136 
Refunds,    52 
Tabulations   of 

Contributions   for,  as  percentages  of  sal- 
ary, 68 

Contributions,  at  standard  age  of  retire- 
ment,  65 

When    salary    increases,    67 
On   withdrawal  of  employe,   29,    140 
For   sickness   and    accident   insurance 
Details,   under   Standard    Plan,    145 
Employes  not  on  annual  salary,    145 
Leave  of. absence,   145 
Pro  rated  according  to  salary,    30 
Contributions   by   the    public   as   employer 
For   annuities 

Accumulation,    51,    127 

Amount,   26,    126 

Cease  at  standard  age  of  retirement,  28 

Compulsory,    18,    10 

Increased  by   1917  legislation,  226 

In   Prance,   213 

In   Massachusetts,  202 

Leave   of  absence,    152 

Limitations,  28,   52,    127 

Period,  52 

Present  employes,  10,  19,  32,  72,  75,  128 

Ratio,   19,  28,   50,   126 

Refunds,   52,    155 

Standard  Plan,   18,   112 

Tabulation   of 

Accumulated  contributions   for  annuities, 

60,   61 

Contributions,    permitting    and    not    per- 
mitting 25  years  service,  55,  56 
Cost  of  annuities,   as  percentages  of  sal- 
ary, 44 


374 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


Contributions 

For  Annuities— tabulation  of  (continued) 

Salary    scales,    illustrating    contributions 

required,    54,    57 
When    insufficient,    27 
Withdrawal  of  employe,   28,    112 
For  sickness  and  accident  insurance 
Details  under  Standard  Plan,   145 
Not  result  of  performance  of  duty,  30 
Result  of  performance  of  duty,  30 
Tabulation   of  contributions  to  provide   an- 
nuities to  present  employes  and  future 
entrants,   94 
For  life  insurance 

Calculation   at  other   ages  than   55   and  60, 

66 

Limitations  of,   29,    52,    136 
Method  of  payment  of  premiums,  29 
Period,    53 

Present  employe,    19,   33 
Ratio,  28,   36,   50,    136 
Refunds,    52,    154 

Tabulations  of  contributions,  60,  65-66,  76 
When  employe   withdraws,   29 
When  salary  increases,   67 
Contributions  to  private  funds,  240,  242 
Conversion   of  life  insurance,  29,   50 
Cost   of    combined    features   of    Standard    Plan, 

44-45 

Costs  under  Standard  Plan,  41,  42,  44,  45-46,  48 
Counsel,    legal,    109 
County   employes,    100,    185 

Courts     and     pension     systems — Trend     of    de- 
cisions, 251-337 

Creditors'   rights  to   pension   money,   289 
Criticisms   of    teachers    pension    and    retirement 

law,   238 
Custodian  of  funds,   103,   110 

Date  of  entering  service,  fixing,   161 

Death,   304,    305 

Decisions,    the   trend    of,    253-337    (see    special 

index    p.   251) 

Decrease  in  financial  support  for  fund,  225 
Deductions  from   salary,  33,  268 
Deficiencies,   216,   217,   228,   229,   230,    232,   233 
Definitions,   under   Standard    Plan,   25,   95,    159 
Delay,  315 
Dependents,  299,  301 
Deposits,  and  payments,   110 
Descriptive  pamphlets  of  industrial  pension  sys- 
tems,  242 
Determination   of   amount  of   annuity,   time   of, 

35 
Digest    of    Illinois    pension    laws    of    1917    (see 

special  chapter  index  pages  339-343) 
Disability,  30,  91,  147,   153,  253,  259,  304,  305, 

311,    340 

Disability  annuity  defined,  95 
Discharge  to  avoid  payment  of  pensions,  250 
Discontinuance    of    pensions,    313-323,    340 
Dismissal,   140,   313 
Distinction    between    pensions   and   gratuities, 

281 

Distinctive  features  of  Standard  Plan,  79-92 
Duties, 

Of  retirement  commission,   107 
Of  retirement  boards,   103 
Of  employer,   108 
Attorney  General,   109 
Duty   to    award    pensions    and   its   enforcement, 

329 

Each    generation    to    provide    for    own    obliga- 
tions, 92 

Effect  of  Workmen's  Compensation,   148 

Effects   of    1917    pension    legislation   in   Illinois, 
223,  234 

Efficiency  promoted  by  pension  systems,   23 

Election   of  boards,   83 

Elective  officers 

Communication    from    judges,    in    re    pension 
systems  for,   165 


U.     S.     Government     provides     pension     for 

judges,   165 

Object  of  survey,    164 
Number  in  state,  164 
Number  in  counties,   185 
Tabulation   of 

Positions  as  to  tenure  acts,   172 
Elective  officers  by  counties,  186 
Elective  officers   downstate  cities,   188 
Eligibility,  298-304,   304-313,  313-323 
Emergency   duty  by   retired  employe,   351 
Employe 

Contributions  by,   18,   27-28,   50,    136,    145 

Defined,  97 

Other    than    police    and    firemen,    downstate, 

178. 

Employe's  life  insurance   fund,   118 
Employer 

Contributions  by  public  as,  18,  27-28,  50,  136, 

145 

Defined,  95 
Duties   of,    108 
Employer's 

Annuity  fund  of  retirement  board,   112 
Life  insurance  fund  of  retirement  board,  117 
Supplementary  fund  of  retirement  board,  119 
Employment   of    pensioner,   249 
Endorsements    for    funds    loaned    or    borrowed, 

161 

Enforcement,   329 
Entering  service,  date  of,   161 
Equalization  funds,  84,  89,   124,   125 
Equalization  of  risks,  21 
Exempting  pensions  from  attachment,  291 
Exemption  from  taxation,   296 
Expense   fund   of  retirement  board,    111 
Exposition     of    main    provisions    of     Standard 

Plan,  25-48 

Explanations,  with  tables,  of  operation  of  an- 
nuity and  life  insurance  features  of 
Standard  Plan,  49-78  . 

Explanatory  comments  on  provisions  of  Stand- 
ard Plan,  33-39 
Extension   of   pension   system,   80 

Failure  to  comply  with  pension  laws,  174 
Features  of  proposed  Standard  Plan 
Some  principal,  9 

Reserve  basis  one  of  the  outstanding,  16 
Field  for  pension  legislation,   164 
Financing  pensions,  14,  20,  227 
Findings     and     constructive    "recommendations 

memorandum   on,   13-23 
Firemen,  345-351 

Basis  for  recommended  annuities  for,  35 

Chicago   fund,   229 

Cities  that  should  have  funds,    172 

Deficiency,   217 

Downstate   funds,   234 

Pension  laws 

For  cities  of  more  than  200,000  inhabitants 

(Chicago),   345-348 
For  cities  of  not  less  than  5,000  nor  more 

than  200,000  inhabitants,   349-351 
Salary  scales,  table,   57 
Under  Standard  Plan,  98 
Volunteers  not  included,   178 
Flat   annuity,   34 
Foreign  countries,  214,   218 
Forfeit  of  pensions,   313-323 
Former  employes,  96,   142,  255 
France,  213 
Fraud,  320 
Funds    of 

Cook  County,  185 
Firemen, 

Metropolitan,  13,  217,  224,  229,  345-348 
Statewide,  21,  172,  173,  174,  176,  177,  178, 

180,  188,  217,  223,  224,  229,  349-351 
House  of  Correction,  21,  367 
Metropolitan,   21-22 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


375 


Funds    of    (Continued) 

Municipal   employes  of   Chicago,   13,   21,   182, 

218,   224,   231,   364-366 
Park  systems,  21,  182,  183,  234 
Policemen 

Mi-tropolitan.  216,  224,  225,  226,  352-355 
Statewide.   21.   216,   234,   356-363 
Public   library   employes,   21 
Public    school    employes    other    than    teachers, 

21 
Retirement   boards,    111 

••!"t   from   attachment  under   S.    P.,   161 
Funds   established  under   S.   P. 
Annuity   reserve,    116 
Children's    annuity,    113 
Compensation,    114 
Employer's   annuity,   112 
Expense,    111 

Employer's  life   insurance,    117 
Employer's    supplementary,    119 
Employe's   life   insurance   fund,   118 
Investment   and  interest,   119 
Salary   deductions   for   annuity,    115 
Sickness  and  accident  insurance,   119 
Treatment  by,   of  assets   and   obligations  of 

prior    funds,    120 
Retirement   commission 

\nticipatinn    warrants,    125 
Funds   established   under   S.   P. 
Annuity    equalization,    124 
Life   insurance   equalization,    125 
Refund  equalization,  124 

ions  when   funds  insufficient,  125 
Provisions    when    surplus    exists    in    funds, 

Transfers    between,    125 
Statewide,    21-22 

hers 

Metropolitan,    13,    181,   217 
Statewide,   13,  21,   37,   181,  235,  368 
Institutional,    180,   223 
Peoria,    181.    369 

Future  entrants,  26,   30,  51,  96,  97,   136,   137 
Life  insurance,   137 
Outline  of  plan   for,  26 
Withdrawal  privilege,  132 
\nnuities.   old  age  retirement,  126 
Defined,   96 

General  assembly,   5,  7,   8,   11,  23,   253 

General    introduction,    5-12 

General  provisions  of  Standard  Plan,  157 

Germany,  212 

Gift  of  public  moneys  invalid,  253 

Good  behavior  and  ^  efficiency,  168 

Government,  commission  form  of,  act,  169 

Governor, 

Excerpt  from    1919  message,  4 

Letter  of  transmittal  to,   3 

Reports,  to  receive  and  publish,  23 

To  appoint  Commission  members,  1 

To  approve  expense  vouchers  of  Commission, 

1 
To  transmit  report  of  Commission,  1 

Granting  of  pensions 

Powers  of  state,  253-270 
Powers   of   municipalities,   280 

Gratuities,  253,  281 

Great   P.ritain,  210-212 

Greater  taxation  under  present  laws  than  under 

Standard  Plan,  46 
•i.   Professor  Frederic,  253 
ups,  89,  97,  109,   166 

Hazards,   6,   14 

-t  salary,  defined,  96 

•  ical  sketch,  Illinois  pension  laws,  219 
"Horrible   examples",   209 
House  of  Correction  employes,  21,  367 

Illinois  Pension  Laws  Commission  of  1918 
Act  providing  for  creation  of  Commission,    1 


Attitude  and  points  of  view,   14 

Builds  on  investigation  of  1916  commission,  5 

Criticism  desired,   11 

Devoted  efforts  chiefly  to  constructive  work,  6 

Hearings  create  demand  for  information,  11 

Letter  of  transmittal,  3 

Mei  tings  and  public  hearings  held,  11 

Members   and   staff,    2 

Recommendations,    15 

State  regulation  of  private  pension  funds  dis- 
cussed, 12 

Work  for  reconstruction  days,  15 
Illinois  Pension  Laws  Commission  of  1916 

Cost  of  pensions  shown  in  report,  46 

Outlined  principles  of  sound  pension  systems, 
6 

Present   funds   found   unsound    and   insecure, 
6 

rHtoted  pension  laws  of  other  states,  207 

Report  should  be  read,  12 

Reserve  plan  described  in  report,  90 

S'lmmary  of  report,  215 

Work  chiefly  investigational,   5 
Illinois    state    teachers    and    retirement    system, 
223,    235-238,    (see    also    teachers    and 
funds) 
Increase    in    financial    support    for    funds,    224, 

Increase  in  pensions,  224,  226,  228 

Indian  cases,  337 

Individual  accounts  to  be  kept,  16 

Industrial     and     institutional     pension     systems, 

239-250 

Industries  having  pension   systems,  typical,  241 
Information    widely    demanded    on    reserve    sys1- 

tem,   11 

Injury   (see  also  disability),  306,  307 
Insolvent  pensioner,  297 
Installments,   20,   32 
Insufficiency  of  fund,  341 
Insurance 

Kinds  called  for  by  present  situation,  14 
Life 

Amount,  29,  38,  135 

Benefit,   in   proportion   of   salary,    18 

Cash  surrender  value,  18 

Contributions 

Depend  on  age  at  entrance,  18 
During  leave  of  absence,  152 
Of  employe,  33,  136 
Of  employer,  33,  75,  136 
Ratio,  89,  136 
When  salary  increases,  67 
Yearly,  basis  for  reserve  under  S.  P.,  17 
Conversion  into  annuities,  38,  50 
Cost,   40 

Equalization  fund  under  S.  P.,  124 
Exempt  from  attachment,  57 
Features  discussed  briefly,   87 
Former  employes,    142 
General  provisions  of  S.  P.,  157 
In   Great  Britain,   211 
In  New  Zealand,  213  . 
Limited  payment  provided  in  S.   P.,   29 
Maximum  limitation  of  salary  contribution, 

29 
Optional  for  employes  not  on  annual  salary 

basis,   17,  87,   149 

Payment,   otherwise  than   in   annuities,    138 
Period,    53 

Present  employes,  137,  142 
Premium  payment  methods,  29 
Premiums   based   on   Am.   experience  table, 

29 
Premiums,    payments    other    than    monthly, 

151 

Principal  feature  of  S.  P.,  9 
Refunds,   154 

Relation  to  salary  unique  in   S.  P.,   17 
Reserve  calculations  needed,   16 
Withdrawal   privileges,  29,   140 


376 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


Insurance 

Life    (Continued) 

Survivorship    annuities,    38,    77,    141,    142, 

System  incorporated  in  S.  P.,  82 
Tabulation  of 

Annual  premiums  required,  43 
Contributions  at  percentage  of  salary,  68 
Contributions    by    employer    for    present 

employes,    76 

Contributions  when  55  years  old,  66 
Contributions  when  60  years  old,  65 
Transfers,  157 

Widows'  annuities,  37,  38,  50,  77,  140,  142 
Sickness  and  accident 

Amount  of  benefit,  30,  146 

Annuities    exempt    from    attachment    under 

S.  P.,  161 
Cash     disbursement     basis     for     providing 

funds,    33,    91 
Contributions 

During  leave   of  absence,   152 
When  not  on  annual  salary  basis,  151 
Yearly  basis,  16 
Details  under  S.  P.,   144 
Disability  annuity,   defined,  95 
Disability  provisions  in  S.  P.,  91 
Distribution  of  contribution,   30,   145 
Fund  established  under  S.  P.,  119 
Not  result  of  performance  of  duty,   30 
Premium  payments  other  than  monthly,  151 
Provided   under    S.   P.,    18 
Result  of  performance  of  duty,  30,  147 
Statistics  not  available  for  premium   rates, 

Workmen's  Compensation,  effect  of,  148 
Yearly  distribution  of  cost  of,  desirable,  34 

T-iterest,  37,  51,  96,  159 

introduction,   general,    5-13 

'nvestigation  of  charges  for  removals,   158 

T-ivestment  and  interest  fund,   119 

Investments,    110,    341 

Members  of  boards  to  have  no  interest  in,  161 

Tustice  in  case  of  early  retirement,  86 

Kinds  of  insurance  situation  calls  for,  three,  14 

Law  of  Averages,  85 

Laws  of  Illinois,    (see  special  index,  p.    339) 

Pension,   7 

Appointments  under  five  acts,  167 
Leave  of  absence,   152,   323 
Legal  counsel,  109 
Legislation,    164,   221,   223 
Length  of  service,   105 
Lessons  from   foreign  countries,  214 
Levying    taxes    for    pensions,    powers    of    state 

in,   270-280 
Liabilities 

Accrued,  liquidation  of,   39 

Actual  and  potential  under   S.   P.,    19 

To  present  employes  and  pensioners,  cost  of 

meeting,    45 
Life  insurance,  29,   135,   149,   151 

Amounts,    135 

Basis  for,   33 

Contributions  for,  65-66,  75,  77,  136 

Cost  of  in  percentages  of  salary,  42,  68 

Determining   premium,    66,    67 

Equalization   fund,    125 

Future   entrants,    29 

Offered   to   all    employes,   87 

Payment   of,    138 

Premiums,    137 

Present  employes,   33,    137 

To  provide  survivorship  annuities,   38 
Limitation 

Of    contributions,    29,    39,    52,    127,    138,    341 

Of   income  of   fund,  358 

Of  pensions,  224,  226 
Liquidation  of  accrued  liabilities,  39,  204 


List  of  present  pension  laws  for  public  em- 
ployes, 7 

Loaning  of  funds,  161 
Local  retirement  board,  (see  retirement  boards) 

Mail-order  houses,  pension  provisions,  245 
Management  of 

Private  funds,  240,  243,  246 
Public  funds,  341 /see  also  Chapter  VII) 
Manufacturers,  pension  systems  of,  239,  241 
Massachusetts,   201,   202,   203,   208,  236 
McClintock's  Table   for  Annuitants,    38 
Medical   examination,    159 
Members,   and   staff,    of   Commission,   2 
Members  of  departments,  298 
Members  of  pension  boards  and  investment  of 

funds,   161 

Memorandum  on  findings  and  constructive  rec- 
ommendations of  the  Commission,  13- 
23 

Mercantile    pension    systems,    239,   245 
Message  of  Governor,  1919,  excerpt  from,  4 
Methodist  Episcopal  church  pensions,  248 
Metropolitan   systems,   employes   in,    172 
Military  or  naval  service,   1861-65,  366 
Minimum  age  of  retirement,  224,  225,  227,  230, 

238 

Minnesota,  201 
Misconduct,    319 
Mistake,    320 
Models,    209 

Modifications    of    plan    outlined    for    future    en- 
trants   to    make    applicable    to    present 
employes,    31-33 
Mortality   tables,    15,   37,    51 
Municipal    clerical    service,    tabulations    of 
Salary     scale     illustrating     contributions     re- 
quired   for    annuities,    54 

Contributions    for    annuities,    permitting,    and 

not  permitting,  25  years  service,  55,  58 

Accumulated    contributions    for   annuities,    60 

Annuities    when    withdrawing  after    10    years 

service,  61 

Annuities   at   standard    age   of   retirement,    63 
Annuities  at  minimum  age  of  retirement,  64 
Contributions   for   life   insurance,   68 
Widows   annuities,    70  < 

Showing  combined  percentages  of  salary  re- 
quired from  employer  and  employe  for 
old  age  retirement  annuity  of  40%  of 
salary,  57 

Municipal  employes,  Chicago,  13,  21,  94,  98, 
182,  218,  224,  231,  364-366 

Nature  of  powers  of  pension  boards,   327 

Naval  service,  1861-65,  366 

Nebraska,    201 

New    Jersey,  201,   208 

New  York,  '201,   202,  237 

New  York  City,  203,  204,  205,  207,  208,  236 

New  Zealand,   213 

New  Zealand  cases,  337 

Number  of  present  pension  laws  in  Illinois,   13 

Oath  of  office  and  qualification,    109 

Objectives,  main,  of  Standard  Plan,  25 

Obligations  of  prior  existing  pension  funds,  120 

Officers,   299 

Officials  and  employes,  downstate  cities  and 
villages,  187 

Old-age   retirement    (see  retirement) 

Operation  of  annuity  and  life  insurance  fea- 
tures of  Standard  Plan,  tables  and 
explanations,  49-78 

Optional   participation,    151,    158,    371 

Other   dependents,    301 

Other  states,   pension  provisions,   207,  219 

Outline  of  Standard  Plan  for  future  entrants, 
26-31 

Park  employes,   other  than  policemen,    183 
Park   police    (see   policemen) 
Payment  of  pensions,   powers  of  state,  270-2. 
Payments,    110,    151 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


377 


Pensions 

As    property,   281-298 
Funds,    court   decisions,    324-327 
Laws    (see  also  special  index  p.   339) 
In  Illinois,  7,  209 
Elsewhere,  201,  207,  218,  219 
Of  present  employes  and  pensioners  assured, 

10 

Problem,  larger  aspects  of,  8 
Pennsylvania,  201,  202,  203,  204,  205,  208,  236, 

237,    238 
Period   of  contributions   for 

Old-age  retirement  annuities,   52 
Life   insurance,    53 
Peoria   teachers,    181 
Percentages  of  contributions,   39-52 
Persons  entitled  to  pensions,  298 
Petitions   to    legislators    for    pension    laws,    fre- 
quent.   17 
Policemerrr  352-363 

Age  of  retirement,  17,  36,  50,  74,  227 
Basis    for    recommended    annuities,    35 
Chicago,  224,  226,  352-355 
Cities  that  should  have  funds,    172 
Cost  of  benefits,  44,  45,  46,  217 
Deficiency,    Chicago,    216 

Downstate,  234,   356-363 
Earlier  laws,   173 
Park,  98,  234,  364-366 
Pension  laws   for 

In  cities  of  not  less  than  200,000  inhabi- 
tants, 352-355 

In  cities,  villages  and  towns  of  not  less 
than  100,000  nor  more  than  200,000 
inhabitants,  356 

In    cities,    villages    and    towns    of    not    less 
than   5,000   nor  more  than   100,000   in- 
habitants,  357-359 
Employed   by    boards    of   park    commission- 

.  360-363 

Revision   of   acts,   224 

Proposed  annuities  for,  17,  2?,  29,  31,  35 
Salary   scales,   table,    57 
Positions  in  public  service  in  Illinois,  survey  of, 

163-193 
Powers 

Of  state  to  grant  pensions,  253 
Of  state  to  require  municipalities  to  pay  pen- 
sions and  levy  taxes  for  them,  270 
Of  municipalities  to  grant  pensions,   280 
Presbyterian   church  ministerial  relief  and   sus- 

tension  fund,  248 

Premiums,   (see  "Contributions"  and  "Tables") 
Present  employe,   defined,  96 
Present  employes  and  pensioners  under  Stand- 
ard   Plan,    10,    19,    31,    39,    73,    77,   96, 
128,  134,   137,   143,  160,  204 
Present  pension   laws   for  public   employes,   list 

of,   7 

Present  value   defined,  96 
Principal  features,  some,  of  proposed  Standard 

Plan,   9 

Prior  annuitant,,  defined,  97 
Prior  service,  96,   105-106 
Private   pension   funds,    239-250 

State  regulation  of,    12,  239,  249 
Privileges  of, 

Annuity,   61,    131 

Withdrawal,   29,   61,   86,   131,    140 
Privy   council  cases,    336 
Property,   pensions  as,  281-298 
Prorating  of  pensions,   159,    341 
Protestant  Episcopal  church  pensions,  248 
Public  hearings  by  Commission,    11 
Public   policy,    165 

Qualification,   certificate  of,   109,    169 

Railroad   pension   systems,    239,   240 
Ratios  of  contributions,   36,    127,    136 
Rates   of   interest  recommended,    37 


Recent  developments  in  other  states,  201-205 
Recommendations,  constructive,  and  findings  of 

Commission,   13-23 
Records,  107,  109 

Recordkeeping,    (see   also   accounting),    103 
Reduction   of   payments,    158 
Reduction   of   pensions,    341 
Refund  equalization   fund,    124 
Refunds,  10,  19,  28,  52,  154,  156,  159,  202,  245, 

342 

Regulation,  state,  of  private  funds,  12,  239,  249 
Regular  interest,  defined,  96 
Relief   associations,    261 
Relief,    accepting,   316 
Removal  or  discharge,    139,    158,   168,  310,   313, 

315 

Repeal  of  park  police  pension  act,  363 
Reports,   104,    107-108,   342 
Representative    boards    to    administer    pension 

affairs,  22 

Requiring  municipalities  to  levy  taxes  for  pen- 
sions,   270-280 
Reserve,  defined,  96 
Reserve  funds,  116,  342 
Reserve  plan,  in  1916  report,  90 

Recommendations  repeated  and  supplemented, 

90 

Reserve  system,, 
Industrial,  250 
Information  in   demand,   11 
Recently   established   in   other   states,   23 
Small  groups,   89 
Reserves,    16,    33,   214,   216 
Resignations,    313 
Retired    employes,    303 
Retirement 
Annuities 

Ages,  36,  49,  203,  224,  225,  227,  230,  231, 

237,  238,  240,  242,  244 
Allowance,   204 
Definition,  95 
Determined  at  standard  age  of  retirement, 

For  future  entrants,  26,  126 
For  present  employes,  31,  127 
Old  age,  26,  31,  53,  126,  149 
Under  superseded  acts,  160 
Boards,  local 

Administration,   31 

Advice  and  assistance,   107,   109 

Appointment  of  members,  102,  103 

Books  and  records,   104 

Compensation,   103 

Composition  of  boards,  22,  101 

Control,   22,   101 

Custodian   of   funds,    103,    104 

Determination  of  assets  and  obligations  of 

prior  existing  fund,    120 
Duties,  103 

Election  of  board  members,  101,  103 
Examination     by     retirement     commission, 

107 

Function,  83 

Funds,  under  S.  P.,  22,   104,   110,    111 
Investments,  22,  110 

Jurisdiction  of  funds,  when  assumed,  103 
Limited  control  under  present  system,  83 
Members,  trustees  of  funds,  105 
Oath  of  office  and  qualification,  109 
Proposed  under  S.  P.,  22,   101 
Reports,  104,  105 
Rules  and  regulations,  105,  106 
Terms  of  elected  and  appointed  members, 

102,   103 
Vacancies,  103 
Commission    (Also,  central  state   supervising 

board  and  state  board  of  control) 
Advice  and  assistance  to  boards,   107,   109 
Appointment  of  members,  106 


378 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


Retirement 

Commission    (Continued) 

Approval      of     statements     of     retirement 

board,  105,  106 
Chairman,   107 
Compensation,    107 
Control   of   boards,    104 
Control  of  funds,  107 
Counsel,    109 
Duties,    107 

Employes  authorized,  107 
Examination      of      affairs      of      retirement 

boards,  107 
Funds  established,  124 
Investments,    109 

Oath  of  office  and  qualification,   109 
Payments  and  deposits,    110 
Reports 

By  commission,  84,   107 
From  retirement  boards,   104,   105 
Terms  of  office  of  members,  106 
To  furnish  actuarial  service,  107 
To    issue   call   for  election    of   members   of 

retirement  boards,    101 
To  prescribe  accounting  systems,  107 
Vacancies,  107 
Compulsory,  323,  334 
Early,  provisions  in  case  of,  90 
Minimum  age  of,  defined,  96 
Standard  age  of,  defined,  96 
Voluntary,   323 
Retroactive  pensions,  255 
Revenue,  342 

Reversion  of  reserves,  158,  161 
Revisions  of  acts,  223-234 
Revocability  of  pensions,  321 
Right  of  withdrawing  employe  to  continue  in- 
surance, 29 
Right  to  a  pension,  conditions  preliminary  to, 

304-313 
Rights  of 

Beneficiaries,  324 

Present  employes  and  pensioners  assured,  10 

Survivors  in  succession,  302 

Salary, 

Deductions    for   annuity    fund    of   retirement 

board,   115 
Defined,  96 
Increases,    when    taken    into    consideration, 

158 

Percentage  cost  for 
Annuities,  34,  41 
Life  insurance,   42 
Scientific  systems,  201 
Service 

Credits,  157,  202,  243 
Defined,  96,   309 

Rendered,  235,  253,  259,  308,  309 
Requirements,   243 
Year,  defined,  96 

Sickness  and  accident  insurance,  30,  144,  150 
Sickness  and  accident  insurance  fund  of  retire- 
ment board,  119 
Small  groups,  21,  89,  166,  177 
Solvency,  5,  6,  48,  81,   177,  205,  215,  220,  223, 

234,  238,  250    (see  also  deficiencies) 
Sound  systems  being  adopted  by  other  states, 

201 

Sources  of  pension  revenues,  327 
South  African  cases,  337 
Special  constitutional  provisions,  266 
Special  indexes 

Chapter  XVI,   Courts  and   Pension  Systems 

— Trend  of  Decisions,  251 
Chapter    XVII,    Digest    of    Illinois    Pension 

Laws,  339 

Special  provisions  extending  Standard  Plan  to 
present  employes  and  pensioners,  19 


Staff,  and   members,   of   Commission,   2 
Stability    of   employment   created   by    pensions, 

79 

Standard  age  of  retirement  (see  retirement) 
Standardization,  84,  250 
Standard  Plan 

Details  of,  95-161 

Exposition  of  main  features,  25-48 

In    1916   report,   221 
State 

Board  of  trustees,  31 

Educational  institution  employes,   101 

Employes,  180 

Institutional  teachers,  101,  198,  199 

Regulation   (see  regulation) 

Superintendent  of  insurance,  342 

Supervising  board,  central,  22 

Teachers    pension   and   retirement   fund    (see 

under   Illinois) 

Statewide  systems,  employes  in,  72 
Statistics,    164,    195-199,  220 
Succession,  302 
Summary  of  report  of   1916    Commission,  215- 

Superannuation  of  clergy,  248 
Supervision   of   accounts  and  records,    107 

upervision,  state,  15,  84 
Supplementary  annuities,  93,  128 
Supreme   court   decisions    (see    Chapter   XVI), 

176 
Survey    of    positions    in    the    public    service    in 

Illinois    (with   analytical   tables),    163- 

193 

Survivors,  302 

Survivorship  annuities,  29,  38,  77,  87,   142 
Widows,  87,   142 

Taxes,  46,   161,   224,  270-280,   342 

Teachers,  158,  169,  170,  201,  203,  208,  212,  217, 

218,  220,  223,  235-238,  246,  368-371 
Telephone  company  pension  systems,  239,  246 
Temporary  annuity,  158 
Tenure,  168,  169,  170,  220 
Thanks  to  officials,  167 
Titles  of  pension  acts,  343 
Transfer 

Of  service,  157,  250 
Of  pension   money,   297 
Treatment     of     assets     and     obligations     prior 

funds,   120 

Trend  of  court  decisions  on  pensions,  251-337 
Trend  of  legislation,  201 
Trustees,  boards  of,  displaced,   103 
Trustees,  state  board  of,  31 
Typical     industrial     concerns     having    pension 

funds,  241 

Unauthorized  grants,  320 
Uniformity  lacking  in  present  laws,  6 
United  States  civil  service  pensions,  218 
Universities,  pension  systems,  246 
University  of  Illinois,  223,  253 
Unmarried  dependents,  299 
Unmarried   male    employes,    159 

Vacancies 

On  retirement  boards,  103 

(hi   retirement  commission,   107 
Vacations,  106 
Value,  present,  defined,  96 
Variations  cared  for  by  equalization  fund,  84 
Variation  of  amounts  of  contributions  and  an- 
nuities, 49 

Voluntary  retirement,  323 
Volunteer  firemen,  172,   178 


ILLINOIS  PENSION  LAWS  COMMISSION,  1918-1919 


379 


Wages,  defined,  96 

'Vaiver  and  misconduct,  319 

What   constitutes  service,   309 

When  employes  shall  come  under  plan,  97 

Who   shall  come  under  provisions  of  Standard 

plan,   158 
Widows 

Annuities,    77,    78,    140,    141,   160,  225,   228 

Annuity,  definition,  95 
.ife  insurance  payable  to,  in  installments,  37 


Pensions,  249 

Present   laws   discriminatory,    86 
Survivorship  annuities,   88,   95,   142 
Withdrawal    from   service,   defined,   96 
Withdrawals,    19,    27,    28,    29,   61,    86,    96,    112, 

131-134 

Workmen's  Compensation,   18,  148,  343 
World's  experience  in   operation  of  public  ser- 
Written  charges  for  removal  or  discharge,   158 
vice  pension  systems,  207-214 


TU    Jo  I  DO 


